Hindalco Industries forms double top pattern

The stock of Hindalco Industries Limited has formed a Doji candlestick pattern as of October 29, 2020, and thereafter, entered into an uptrend and recorded series of higher highs & lows. On December 04, the stock had formed a swing high of Rs 255.95. Thereafter, the stock witnessed a minor correction and touched the level of Rs 238. However, the stock failed to sustain at lower levels and the prices attempted to return to the previous trend but the bulls were not able to push the prices much higher, and thus, the stock registered an almost identical top on December 17, 2020. This resulted in the formation of Adam & Adam double top pattern.  

On Monday, the stock had given a neckline breakdown of Adam & Adam double top pattern. Along with this neckline breakdown, the stock, after a span of almost 33 trading sessions, had closed below its crucial short-term moving average i.e. the 20-day EMA.  

Among the momentum indicators, the 14-period daily RSI has cooled off after touching the zone of 79-80 and at present, its reading is 51.22. The RSI is trading below its 9-day average and it is in a falling mode, which indicates a further downside momentum. The daily MACD stays bearish as it is trading below zero line. The histogram is suggesting a pickup in the bearish momentum. Moreover, the stochastic oscillator is also suggesting a bearish momentum as the fast stochastic is trading below its slow stochastic line.  

Going ahead, we expect the bias to remain negative as long as the stock sustains below Monday’s high of Rs 249.75 level. On the downside, the level of Rs 221, followed by Rs 210 would be seen as the next support zone for the stock.  

On Monday, the stock of Hindalco Industries Limited dipped by 7.04 per cent and closed at Rs 232.30 per share. The stock opened at Rs 246 per share and hit an intraday high of Rs 249.75 & a low of Rs 228.65 per share on NSE.