Technical Insight: Bajaj Finance surges 1 per cent plus, gives trendline breakout

Bajaj Finance, NBFC promoted by Bajaj Finserv, surged as much as 2.4 per cent and closed 1.6 per cent up, in otherwise negative market conditions. The stock emerged as the second top gainer in Nifty 50, where only 4 stocks could make up to close with 1 per cent plus profits.

The stock of Bajaj Finance was trading with lower tops and lower bottoms since it hit all time high 1985.90 on September 7, 2017. On the monthly time frame, the stock had hit kind of double top at all-time high levels and then corrected up to 38.2 per cent retracement of the prior upward rally. On the daily time frame, Bajaj Finance started correcting from its all-time high after benchmark indices had just initiated a fresh buying. The stock has been trading against the markets.

Technically, the stock had attempted a breakout of its prior resistance on January 5, but could not sustain and tumbled after hitting a double top at 1843 levels on January 8 and 9. Now the stock has recently breached multiple point downward sloping trendline level. The breakout is supported by rising volumes and 14-period RSI positive crossover. Going forward, we can expect a potential upside once it breaches 1672 levels on closing basis.