Apollo Hospitals set for a trend reversal; heres why!

On Tuesday, the stock rallied nearly 3.4 per cent

The stock of Apollo Hospitals Enterprise had registered an all-time high of Rs 5,935.40 as of November 26, 2021. The stock had formed a bearish pin bar at all-time high levels and thereafter, it witnessed a severe correction of nearly 30 per cent in just 43 trading sessions. This severe correction halted near about the 200-DMA, which is an important moving average.   

After taking support around the 200-DMA, the stock witnessed a pullback rally, which resisted around the 100-DMA, and once again, it entered into a declining phase.   

On Tuesday, the stock rallied nearly 3.4 per cent, and hence, formed a bullish engulfing pattern on the daily timeframe. Interestingly, the formation of a bullish reversal pattern has occurred at quite a significant place i.e., 200-DMA, and further to add relevance to this pattern, the volume for the day was greater since February 15, 2022. An important point to note here is that the bullish engulfing pattern requires confirmation in subsequent trading sessions to act as a bullish reversal pattern.   

The strong move by the stock has led it to reclaim its 20-DMA and interestingly, the daily MACD has also given a fresh buy signal. Meanwhile, the elder impulse system has turned bullish.   

The stock is up by 3.11 per cent on an MTD basis while on a YTD basis, it is down by 8.33 per cent.