We observed formation of a bullish engulfing pattern in the last week and the stock price is now showing a follow-through up move in this week
Eveready Industries saw a stable 2019 after falling by over 40 percent in the last one year and the chart patterns are suggesting an up move in offing. The stock was trading at Rs 366.15 on March 13, 2018.
The weekly timeframe chart of Eveready (given below) signals an upside reversal pattern. After showing weakness in the last 5-6 weeks, the stock price has witnessed an upside bounce in the last week.
“We observed formation of a bullish engulfing pattern in the last week and the stock price is now showing a follow-through up move in this week. We also observe a consistent higher bottom formation (indicative of orange uptrend line),” said an HDFC Securities note.
The stock can be bought now with a target price of Rs 234-265, and a stop loss of Rs 189. The time period for the trade kept by analysts at HDFC Securities is 1-2 months.
The volume has expanded sharply during an upside bounce in the stock price over the last two months. This could mean increasing participation of bulls at lower levels, and another prominent indicator of a bottom reversalin the stock price.
The stock price is now making an attempt to move above the intermediate term moving average (green curvy line-weekly 20cperiod EMA) at Rs 210 levels. Hence, one may expect further upside in the stock price for the near term.
Weekly 14 period RSI shows a positive indication. This RSI pattern could mean a possibility of further strengthening of upside momentum in the stock price for the near-term.
“The overall positive chart pattern of Eveready Industries India shows a long trading opportunity,” said the note.
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