Asian Paints forms Evening Doji Star pattern

The stock of Asian Paints forms Evening Doji Star candlestick pattern on the daily time frame. Evening Doji Star is a reversal candlestick pattern which is bearish in nature and appears at the end of an uptrend. It is a complex pattern made of three candles, the first candle is bullish in nature, the second is indecisive and the third candle is bearish in nature.

On Tuesday, the stock has managed to close below its weekly pivot and short-term moving averages, i.e. 8-day EMA and 13-day EMA. Among the momentum indicators, the 14-period daily RSI is currently quoting at 56.88 and it is trading below its 9-day average. The stochastic oscillator is also suggesting some bearish momentum as %K is below the %D. The daily MACD stays bearish as it is trading below its zero line since last 14 trading sessions. Moreover, there has been a negative divergence between the daily RSI, daily stochastic and the stock price movement, which suggests a limited upside.

In the near-term, the zone of Rs. 1570-1555 is likely to act as major support as the short-term moving average 20-day EMA and recent swing low is placed in that region. Failure to hold this support would lead to further correction up to the 50-day EMA, which is currently placed at Rs. 1506.85. While on the upside, Friday's high of Rs. 1622.50 will be a major hurdle for the stock.

On Tuesday, the stock of Asian Paints closed at Rs. 1576.50 per share, dipped by 2.40 per cent. The stock opened at Rs. 1608 per share and hit an intraday high of Rs. 1609 and a low of Rs. 1574.35 per share on BSE.