Coromandel International forms bearish engulfing candle

The stock of Coromandel International Limited has formed a reversal spinning bottom candlestick pattern as on March 23, 2020 and thereafter, the stock has witnessed almost 50 per cent upside momentum in 62 trading sessions. Considering the daily timeframe, the stock has formed a reversal bearish engulfing candlestick pattern. This pattern is considered to be a bearish reversal pattern and usually occurs at the top of an uptrend.

Among the momentum indicators, the leading indicator, 14-period daily RSI, cooled off after touching the zone of 75 and at present, its reading is 67.77. The RSI is in a declining mode, which indicates a further downside momentum. Moreover, a negative divergence was also spotted at the daily timeframe on the RSI, which indicates a limited upside.

Going ahead, if the stock sustains below Friday’s session low of Rs 704.25 and trades convincingly below this level then, there is a high probability of Friday’s high point of Rs 748.65 becoming a temporary top for the stock.

On Friday, Coromandel International stock closed at Rs 720 per share, dipped by 2.75 per cent. The stock opened at Rs 748 per share and hit an intraday high of Rs 748.65 and a low of Rs 704.25 per share on NSE.