Just Dial forms Homing Pigeon pattern

The stock of Just Dial Limited forms Homing Pigeon candlestick pattern on daily time frame. On Tuesday, the stock opened with a minor upside gap above Monday’s close within its real body. But unlike the Bullish Harami pattern, it closed with small body red candle. It signals a 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 that both the bodies are red rather than opposite in colour. The pattern may indicate that there is a weakening of the current downtrend, which increases the likelihood of reversal. 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 534.90.

The indicators and oscillators are lying below 50 and tilted southward. There has been a bullish divergence between the daily RSI, daily stochastic and stock price movement, which suggests limited downside. Going ahead, it’s important for the stock to sustain and close above the first candles high which is placed at Rs 534.90. A sustainable move above the level of Rs 534.90 is likely to open up gates for further rally towards the levels of Rs 557.60. While on the downside, Monday’s sessions low of Rs 491 is likely to act as short-term support.

On Tuesday, the stock of Just Dial closed at Rs 504.95 per share, surged by 1.05 per cent. The stock opened at Rs 505.10 per share and hit an intraday high of Rs 514.15 and a low of Rs 500.70 per share on BSE.