Hindalco Industries forms three outside down candle

The stock of Hindalco Industries Limited has formed a reversal spinning bottom candlestick pattern as on the weekend of March 27, 2020 and thereafter, witnessed almost 89 per cent pullback rally. However, on the daily timeframe, the stock has formed a reversal three outside down candlestick pattern near 200-day EMA level, which is clearly an alarming sign for the bulls.

The three outside down candlestick pattern, representing confirmation of the bearish engulfing pattern, can only show the success of the forecast of the appropriate engulfing pattern.

With this bearish formation, the stock has also managed to close below its weekly pivot and short-term moving averages, i.e. eight-day EMA and 13-day EMA. The leading indicator, 14-period RSI, is currently quoting at 54.80 and is trading below its nine-day average. Interestingly, the daily RSI has given a neckline breakdown of Adam & Adam double top pattern, which is also a bearish sign. Further, the daily stochastic is also suggesting a bearish momentum as fast stochastic is trading below its slow stochastic sign.

Going ahead, the 20-day EMA is likely to act as an immediate support, which is currently placed at Rs 145.05 while, a major support is placed in the zone of Rs 140-Rs 137 as it is the confluence of upward sloping trendline support and 50-day EMA level. On the upside, Wednesday’s high of Rs 160.10 will be a major hurdle for the stock.

On Thursday, the stock of Hindalco Industries closed at Rs 146.55 per share, dipped by 3.17 per cent. The stock opened at Rs 150 per share and hit an intraday high of Rs 152.25 and a low of Rs 144.70 per share on BSE.