PNB Housing: Trendline Break Meets Resistance

In this morning’s note,

was testing a falling trendline drawn from the August highs, with RSI near 61 and rising volume. The 1-hour chart now shows what followed. The stock moved above the line, retested it from above around 1,155-1,160, and then pushed up to 1,203, close to the 1,205 horizontal resistance. That level has capped the stock several times since August, and price is now trading near 1,197 with RSI at 69.89, close to the overbought zone of 70. This is a useful example of how a trendline break works in stages. Stage one is the break itself. Stage two is the retest, where the old resistance often acts as support. Stage three is the move towards the next barrier. The stock has completed these steps, and it is now at the barrier that has stopped earlier rallies. Levels to note: resistance at 1,204.5, with support at the 1,155-1,160 trendline retest zone and then the 1,080-1,100 swing lows. How price behaves around 1,204.5 is worth observing. A close above it with strong volume would suggest a range breakout, while repeated rejections could mean a pause within the earlier range. A trendline break often follows three steps: the break, a retest of the old line, and a move to the next resistance, where price reaction decides what follows. Disclaimer:This is for educational purposes only and is not investment advice. Please consult your financial advisor before making any investment decisions. SEBI Registered Research Analyst — INH000025212.