DLF forms evening doji star pattern

The stock of DLF Limited forms an evening doji star candlestick pattern on the weekly time frame. Evening doji star is a reversal candlestick pattern, which is bearish in nature and appears at the end of an uptrend. It is a complex pattern, made of three candles, wherein, the first candle is bullish in nature, the second one is indecisive and the third candle is bearish.

Along with this bearish formation, the stock after a span of almost three months has managed to successfully close below its crucial short-term moving averages i.e. 50-day EMA. Among the momentum indicators, the 14-period weekly RSI cooled off after touching 75-80 zone and at present, its reading is 57.36. RSI is trading below its 9-week average and it is in falling mode, which indicates a further downside momentum. The momentum is fading as MACD histogram is declining since the last six weeks. The stochastic oscillator is also suggesting some bearish momentum as per cent K is below the per cent D. 

Going ahead, if the stock sustains below Saturday’s session low of Rs 224 and trades convincingly below this level then, there is a higher probability that the current week’s high point of Rs 266.55 would become a temporary top for the stock. 

On Saturday, the stock of DLF closed at Rs 228.95 per share, dipped by 12.09 per cent. The stock opened at Rs 258.95 per share and hit an intraday high of Rs 266.55 and a low of Rs 224 per share on NSE.