Cummins India forms bullish engulfing candle

The stock of Cummins India Limited has formed a bullish engulfing candlestick pattern on a daily time frame. 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 along with strong volumes.

Interestingly, the daily RSI has broken out of the falling wedge pattern, which is a bullish sign. The daily stochastic oscillator has also given a positive crossover, which indicates a further upward momentum. Moreover, the positive divergence is clearly visible between daily RSI, daily stochastic and stock price movement, which suggests a limited downside.

Going ahead, if the stock sustains above Wednesday’s session high of Rs 338.05 and trades convincingly above this level then, there is a high probability that Wednesday’s lowest point of Rs 280 would become a temporary bottom for the stock.

On Wednesday, the stock of Cummins India closed at Rs 330.05 per share, surged by 14.61 per cent. The stock opened at Rs 286 per share and hit an intraday high of Rs 338.05 and a low of Rs 280 per share on NSE.