Granules India forms Homing Pigeon candlestick pattern

The stock of Granules India Limited has formed a Homing Pigeon candlestick pattern on the daily timeframe. On Friday, the stock opened with a minor gap above the Thursday’s close within its real body. But unlike the Bullish Harami pattern, it closed with Small Body red candle. It signals the weakening of the short-term downtrend and may reverse to the upside after the confirmation candle.

Homing Pigeon closely resembles the harami or inside day pattern, except the both bodies are red rather than opposite in color. However, the confirmation of pattern is required on the third candle. The third candle has to close above the high of the first candle to trigger a buy signal, which is currently placed at Rs 127.45.

The indicators and oscillators are lying below 50 and tilted southward. The daily stochastic is in an extremely oversold zone but the reversal is yet to be confirmed. In the near term, the zone of Rs 126-Rs 127.50 is likely to act as immediate hurdle for the stock, as 20-day EMA and Thursday’s high is placed in that region. A decisively close above this level would lead to an extension of the pull-back toward Rs 133, Followed by Rs 136. While on the downside, the 50-day EMA is expected to act as a major support for the stock, which is currently placed at Rs 121.90 level.

On Friday, the stock of Granules India closed at Rs 123.65 per share, surged by 0.57 per cent. The stock opened at Rs 123.90 per share and hit an intraday high of Rs. 125.10 and a low of Rs123.30 per share on BSE.