Chart Check: Flag breakout on daily charts makes ABB an attractive buy; likely to hit fresh record highs

ABB, part of the heavy electrical equipment space, gave a breakout from a Flag pattern on the daily charts which has opened room for the stock to head towards Rs 3,500 level, suggest experts.

The stock hit a record high of Rs 3,445 on 2 September 2022 but it failed to hold on to the momentum. However, the stock saw a vertical rise in the last 1 month, outperforming benchmark indices in the same period.

A bullish flag pattern is formed with strong uptrends and is considered a continuation pattern. The neckline of the pattern was placed above Rs 3,200 levels. The stock closed at Rs 3,312 on 1 March 2023.

The stock rose by about 19% in 1 month compared to over 1% fall seen in the Nifty50 in the same period.

Short term traders can look to buy the stock now or on dips for a possible target towards Rs 3,500, suggest experts.

ABB stock is trading well above most of the short and long term moving averages such as 5,20,30,50,100 and 200-DMA on the daily charts which is a positive sign for the bulls.




MACD is above its center and signal line which is a bullish indicator, Trendlyne data showed. The stock is trading near overbought levels which suggests that a near term pullback could be on the cards.

ABB stock is in an overall uptrend and forming higher highs – higher lows structure on monthly scale from the past three months. On a weekly scale as well it has retested the previous resistance zone and formed a strong bullish candle.

“On daily scale ABB stock has given consolidation breakout after thirteen sessions and formed a strong Bullish candle. It has also formed a Pole & Flag pattern on daily scale which is a bullish continuation pattern with noticeable volumes,” Arpit Beriwal, Analyst, Equity Derivatives and Technicals, MOFSL, said.

“It is holding well above its 20 DEMA and RSI (Relative strength index) has given breakout which suggests momentum is likely to continue in coming sessions,” he said.

Overall, ABB is witnessing strong buying demand in capital good space and the stock is likely to outperform in the near future, suggest experts.

“Looking at the overall chart structure on daily scale we expect the stock to move higher towards Rs 3,500 zones,” recommends Beriwal.

“We recommend buying the stock at current levels with keeping stop loss below Rs 3,190 levels on a closing basis for an upside move towards Rs 3,500 zones,” he added.

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