Bajaj Finserv forms Evening Doji star pattern

The stock of Bajaj Finserv Limited forms Evening Doji Star candlestick pattern on the daily timeframe. 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, wherein the first candle is bullish in nature, the second one is indecisive, and the third candle is bearish.

With this bearish formation, the stock has managed to close below its crucial short term moving average, that is, 8-day EMA, after a span of almost 20 trading sessions. Among the momentum indicators, the 14-period daily RSI cooled off after touching 75 zone and, at present, its reading is 63.57. The RSI is trading below its 9-day average and is in a declining mode, which indicates further downside momentum. The stochastic oscillator is also suggesting some bearish momentum as %K is below the %D. Moreover, there has been a negative divergence between the daily RSI, daily stochastic and the stock price movement, which suggest a limited upside.

Going ahead, if the stock sustains below Fridays session low of Rs. 9,095.30 and trades convincingly below this level, then there is a high probability that Thursday’s high point of Rs. 9,284.75 would become a temporary top for the stock. 

On Friday, the stock of Bajaj Finserv Ltd. closed at Rs. 9,118.90 per share, dipped by 1.31 per cent. The stock opened at Rs. 9,230 per share and hit an intraday high of Rs. 9,235.80 and a low of Rs. 9,095.30 per share on NSE.