Adani Power forms three black crows pattern

The stock of Adani Power Limited has formed a ‘three black crows’ candlestick pattern on the daily timeframe. The ‘three black crows’ candlestick pattern is a bearish reversal candlestick pattern.

The pattern occurs when bears overtake the bulls during three consecutive trading sessions. On the pricing chart, the pattern showcases three bearish long body candles with short or no shadows. This pattern usually indicates a weakness in an established uptrend as well as the potential emergence of a downtrend.

Along with this bearish formation, the stock has also managed to close below its weekly pivot and short-term moving averages, i.e. 5-day EMA and 8-day EMA level. Among the momentum indicators, the 14-period daily RSI has cooled off after touching an extremely overbought zone and, at present, its reading is 61.54. The RSI is trading below its 9-day average and it is in a falling mode, which indicates a further downside momentum. The stochastic oscillator is also suggesting some bearish momentum as per cent K is below the per cent D.

Going ahead, the stock has strong support in the zone of Rs 48.10-Rs 47.10, while, on the higher side, major resistance is placed in the zone of Rs 55-Rs 56.30 level.

On Wednesday, the stock of Adani Power closed at Rs 49.25 per share, down by 6.01 per cent. The stock had opened at Rs 53.05 per share and hit an intraday high of Rs 54.20 and a low of Rs 48.65 per share on NSE.