ITC forms Falling Three Methods Pattern

The stock of ITC Limited has formed Falling Three Methods candlestick pattern on the daily timeframe. The Falling Three Methods is a bearish continuation pattern and usually appears in a downtrend.

This pattern shows that the bulls still do not have enough conviction to reverse the trend and is used by some active traders as a signal to initiate new or add to their existing short positions.

Currently, the stock is trading below its 20-day EMA (243.85), 50-day EMA (248.05), 100-day EMA (253.75), and 200-day EMA (262.70), which indicates a medium-long term downtrend. The leading indicator, 14-period daily RSI, is currently quoting at 37.09 and is trading below its 9-day average. On the directional index, the bearish strength is higher than the bullish strength, as +DI is much below the -DI.

Going ahead, the stock has strong support in the zone of Rs. 235-233, while on the higher side, the major resistance is placed in the zone of Rs. 243-245 level.

On Monday, the stock of ITC closed at Rs. 236.90 per share, down by 1.97 per cent. The stock opened at Rs. 243.70 per share and hit an intraday high of Rs. 243.70 and a low of Rs. 236.60 per share on the BSE.