Berger Paints forms Bearish Engulfing candle

The stock of Berger Paints India Limited has formed a Bearish engulfing candlestick pattern on the daily time frame. The bearish engulfing candlestick pattern consists of two real bodies of opposite colours. The second days body pattern completely engulfs the previous days one. A large bearish candle suggests that this is a sudden and decisive shift to bearish sentiments.

Among the momentum indicators, the 14-period daily RSI has cooled off after touching the 85 zone and, at present, its reading is 67.73. The RSI is trading below its 9-day average and it is in falling mode, which indicates further downside momentum. The fast stochastic line is also trading below its slow stochastic line since last five trading sessions. Moreover, there has been a negative divergence between the daily RSI, daily stochastic and the stock price movement suggesting limited upside.

Going ahead, the stock has immediate support in the zone of Rs. 475-Rs. 464 as it is the confluence of upward sloping trendline and short term moving averages, i.e. 8-day EMA and 13-day EMA. While on the upside, Friday's high of Rs. 506 will be a major hurdle for the stock.

On Tuesday, the stock of Berger Paints closed at Rs. 479.55 per share, dipped by 3.91 per cent. The stock opened at Rs. 500 per share and hit an intraday high of Rs. 505 and a low of Rs. 477.40 per share on BSE.