KSCL forms bullish engulfing candle

The stock of Kaveri Seed Company Limited gave a multiple touch point upward sloping trendline breakdown at Rs. 650 on February 8, 2019 and gave almost continuous downfall along with rising volume. However, the downfall is halted near long-term upward sloping trendline on weekly scale. At present, on daily time frame, the stock had formed bullish engulfing candle, which suggests bulls are taking control near long-term trendline. 

Among the momentum indicators, the RSI is currently quoting at 24.25, which suggests stock is in oversold zone. However, the fast stochastic line is trading above its slow stochastic line which suggests pause in downtrend. 

In near-term, the zone of Rs. 425- 430 is likely to act as immediate resistance. A decisively close above this level would lead to an extension of the pullback toward Rs. 455. While on the downside, the zone of Rs. 370- 380 is likely to act as major support as upward sloping trendline is placed in this region. 

On Tuesday, the stock of KSCL Ltd closed at Rs. 411 per share, surged by 4.26 per cent. The stock opened at Rs. 391 per share and hit an intraday high of Rs. 413.20 and a low of Rs. 385.10 per share on NSE.