Caplin Point Laboratories forms a bullish engulfing candle

The stock of Caplin Point Laboratories has formed a bullish engulfing candlestick pattern on the daily timeframe. The bullish engulfing candlestick pattern is considered to be a bullish reversal pattern and usually occurs at the bottom of a downtrend. The reversal is further justified with strong volumes.

Along with this bullish formation, the stock has also managed to close above its weekly pivot and above its short and long-term moving averages, i.e. 20-day EMA, 50-day EMA, 100-day EMA and 200-day EMA. The relative strength index (RSI), which is a momentum indicator in the daily timeframe, turned up from the 40-mark and currently, it is quoting at 52.01. Further, the daily stochastic oscillator is suggesting some bullish strength as well since per cent K is above the per cent D.

Going ahead, if the stock sustains above Wednesday’s session high of Rs 349.75 and trades convincingly above this level, then there is a high probability that Wednesday’s lowest point of Rs 306.90 would become a temporary bottom for the stock.

On Wednesday, the stock of Caplin Point Laboratories closed at Rs 346.50 per share, surged by 10.92 per cent. The stock opened at Rs 308.10 per share and hit an intraday high of Rs 349.75 and a low of Rs 306.90 per share on NSE.