BAJAJFINSV trades in broadening formation, right-angle & ascending pattern

Considering the daily time frame, the stock of Bajaj Finserv Limited is trading in a broadening formation, right-angled and ascending pattern since the last 75 trading sessions. The broadening formation, right-angled and ascending pattern is rare and is considered to be a bearish reversal pattern.

This pattern is formed by two diverging lines; the resistance line is upward sloping and the support line is horizontal. Unlike most consolidation patterns, broadening formation features increasingly wide ranges and greater volatility as the time passes. This pattern reflects indecisiveness among investors and extreme volatility.

Currently, the stock is trading below its weekly pivot and short and long-term moving averages, i.e. 20-day EMA, 50-day EMA and 100-day EMA. The leading indicator, 14-period daily RSI is currently quoting at 33.43 and it is trading below is nine-day average. The daily and weekly MACD stays bearish as it is trading below its zero line. Moreover, on the directional index, the bearish strength is higher than the bullish strength as +DI is much below the -DI.

Going ahead, in any case, the stock closes below the level of Rs 8,800. This will result in a breakdown of broadening formation. On the higher side, the level of Rs 9,300, followed by Rs 9,550, would be seen as the next resistance zone for the stock.

On Monday, the stock of Bajaj Finserv closed at Rs 8,901.45 per share, dipped by 1.74 per cent. The stock opened at Rs 9,260 per share and hit an intraday high of Rs 9,320.35 and a low of Rs 8,805.25 per share on BSE.