L&T Finance Holdings form homing pigeon pattern

The stock of L&T Finance Holdings Limited formed a homing pigeon candlestick pattern on the daily time frame. On Monday, the stock opened with a minor gap above Friday’s close within its real body but unlike the bullish harami pattern, it closed with small body red candle. It signals the weakening of a 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 the both bodies are red rather than being opposite in color. 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 109.50 level.

The indicators and oscillators are lying below 50 as well as tilted southward. The leading indicator, 14-period daily RSI is currently quoting at 31.22 and it is trading below its nine-day average. But the daily stochastic has given a positive crossover in oversold region, indicating an upside momentum.

Going ahead, it’s important for the stock to sustain and close above the first candles high which is placed at Rs 109.50. A sustainable move above the level of Rs 109.50 is likely to open up gates for a further rally towards the levels of Rs 115, followed by Rs 120. While on the downside, Friday’s sessions low of Rs 99 is likely to act as a short-term support.

On Monday, the stock of L&T Finance Holdings Limited closed at Rs 102.70 per share, surged by 2.70 per cent. The stock opened at Rs 102.90 per share and hit an intraday high of Rs 107.20 and a low of Rs 101.40 per share on BSE.