NYKAA: Your Congestion. Our Breakout

24 ก.ค.

The weekly chart of NYKAA is shaping up interesting. The first thing that'll strike you is that it has been a BIG under-performer, significantly below its all-time high and still struggling. We may be heading for some better times. Here are my thoughts -

1. The stock bottomed out in May 2023 and has since managed a multi-leg shallow rally. An important day was 8 January 2024, when we noticed a high-volume move (marked with blue arrows).

2. We have yet to trade above this day's high, and since then, the chart has consolidated and taken the shape of an "ascending triangle." In terms of price and volume, this triangular pattern is playing well with lower average volumes and contracted price swings.

3. Now the upper border of this ascending triangle confluences with the first zone of resistance at (170-190). Therefore, a break above 190 is crucial for the stock, confirming a pattern breakout and opening up further upsides.

4. Based on a long-term volume profile, I have marked expected resistance bands of (220-240) and (330-360). Out of these two zones, the first one merges well with the target from the vertical height of the triangle.

5. Bottomline = If the overall market sustains, then we can expect a breakout from NYKAA above 190 and a retest of the (220-240) range.

Feel free to share your thoughts.