Balrampur Chini forms Three Black Crows pattern

The stock of Balrampur Chini Mills Limited has formed a Three Black Crows candlestick pattern on daily time frame. Three Black Crows candlestick is a bearish reversal pattern. The pattern is seen after an uptrend. It consists of three large consecutive declining bearish candles. This pattern usually indicates a weakness in an established uptrend and the potential emergence of a downtrend.

Along with this bearish formation, the stock, after a span of almost one month, has closed below its crucial short-term moving averages i.e. 8-day EMA and 13-day EMA. Among the momentum indicators, the 14-period daily RSI has cooled off after touching the 75 zone and, at present, its reading is 54.49. The RSI is trading below its 9-day average and it is in falling mode, which indicates further downside momentum. The fading momentum is also indicated by the MACD histogram that is declining since last five trading sessions. The stochastic oscillator is also suggesting some bearish momentum as %K is below the %D.

In the coming sessions, we expect the bias to remain bearish as long as the stock is trading below Rs. 173.90. Thus, any intraday pullback towards Rs. 165-Rs. 170 should be used as a selling opportunity. While on the lower side, the level of Rs. 150, followed by Rs. 144 would be seen as the next support zones for the stock.

On Monday, the stock of Balrampur Chini Mills Limited closed at Rs. 153.95 per share, down by 5.47 per cent. The stock opened at Rs. 163.60 per share and hit an intraday high of Rs. 163.80 and a low of Rs. 151.8 per share on BSE.