Chart Check: After 14% rally in a month, ascending triangle breakout makes KPR Mills an attractive buy

KPR Mills, part of the garment industry, rose to a fresh 52-week high in June 2023 and also recorded a breakout above the ascending triangle which has opened room for the stock to head towards Rs 700 in the short to medium term, suggest experts.

The stock rose from Rs 556 recorded on 12th May 2023 to Rs 637 as on 12th June which translates into an upside of about 14% in a month. The stock hit a fresh 52-week high of Rs 648 on 12th June.

The momentum helped the stock to breakout from the swing high of Rs 638 recorded on 22nd August 2023 on 12th June 2023 but it failed to hold on to the momentum. The stock closed at Rs 636 on the BSE.


The breakout of the ascending triangle pattern on the daily charts was placed at Rs 630. Ascending triangles are also known as continuation patterns and a breakout from the rising trendline suggests that bulls are in control. Also Read

In terms of price action, the stock is trading well above most of the crucial short and long-term moving averages of 5,10,30,50,100 and 200-DMA on the daily charts.

The momentum pushed the stock near the overbought zone; hence, some profit booking could be on the cards.

The Relative Strength Index (RSI) is placed at 72.2, and RSI above 70 is considered overbought. This implies that stock may show pullback, Trendlyne data showed. MACD is above its center and signal Line, this is a bullish indicator.

KPR Mill stock was one of the best outperformers in the textile sector post Covid during 2020 to 2022. It has generated over 5x returns during the same time period and the stock price went from Rs 150 odd to an all-time high Rs 760.

Post registering an all-time high of around Rs 760, stock prices corrected 38% and mode double bottom near Rs 480.

“Since Dec 2022 we are seeing price has started moving up in a higher top/higher bottom pattern and registered a 30% gain in the last 7 months. At the current juncture, we can see a bullish price pattern breakout with volume visible on the chart,” Kiran Jani CIRA, Head of Technical Research at Jainam Broking, said.

“The price has formed a big ascending and symmetrical triangle. And within that triangle, we are seeing trading above its 200 SMA after a long time. The breakout from the symmetrical triangle came above Rs 620. Recently after that breakout, we can see a fresh breakout of the ascending triangle above Rs 630,” he said.

“Looking at the relative strength index (RSI-14) shows the multiple bullish divergences. And in all three-time frames daily/weekly and monthly the RSI is trading into the bullish zone. Based on volumes and the RSI divergence we are expecting sharp upside,” highlighted Jani.

“So, considering the current chart pattern we are expecting prices to touch Rs 730 in the medium term, if prices hold Rs 580 levels,” he recommends.

(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)