Kansai Nerolac forms bullish engulfing candle

The stock of Kansai Nerolac Paints Ltd has formed a bullish engulfing candle on the daily time frame near the upward sloping trendline support, which suggests bulls are taking control near the short-term support zone. The bullish engulfing candlestick consists of two real bodies of opposite colours. The second day’s body completely engulfs the previous day's body. A large bullish candle suggests this was a sudden and decisive shift to bullish sentiment.

On Monday, the stock has managed to close above its weekly pivot and short-term moving average, i.e. 8-day EMA, 13-day EMA and 20-day EMA. The 14-period daily RSI took support at 31-30 level historically many times and this time also it bounced exactly from the same level. The stochastic oscillator is also suggesting some bullish strength as %K is above the %D. Moreover, the Ichimoku chart on the 60-minute time frame is clearly giving a positive view as it closed above the Ichimoku cloud, KS and TS lines.

Going ahead, the stock needs to sustain above the zone of Rs. 437-Rs. 440 for the bullish momentum to continue. On the downside, the Monday’s low of Rs. 397.05 is likely to act as crucial support for the stock.

On Monday, the stock of Kansai Nerolac Paints Ltd closed at Rs. 433.50, surging by 7.29 per cent. The stock opened at Rs. 400.30 and hit an intra-day high of Rs. 437.95 and low of Rs. 397.05 on the NSE.