LTTS forms double top pattern

The stock of L&T Technology Services (LTTS) Limited has formed a reversal spinning bottom like candlestick pattern as on November 18, 2019 and thereafter, entered into the uptrend and recorded series of higher high and low. On January 17, 2020, the stock had formed a swing high of Rs 1,780, where it has formed reversal hanging man candlestick pattern and thereafter, the stock prices fell to touch the level of Rs 1,628.05. However, the stock failed to sustain at lower level and the prices attempted to return to the previous trend but the bulls were not able to push prices much higher and the stock registered an almost identical top on February 24, 2020. This resulted in the formation of Adam and Adam double top pattern.

On Friday, the stock has given a neckline breakdown of the double top pattern. This breakdown was confirmed by the above 50-day average volumes. With the pattern breakdown, the stock had formed a reversal bearish engulfing candlestick pattern on the weekly time frame. Currently, the stock is trading below its weekly pivot and short-term moving averages, i.e. 13-day EMA, 20-day EMA and 50-day EMA. The leading indicator, 14-period daily RSI is currently quoting at 41.09 and it is trading below its nine-day average.

Going ahead, we expect the bias to remain negative as long as the stock sustains below Friday’s high of Rs 1,668.20 level. On the downside, the level of Rs 1,575, followed by Rs 1,543 would be seen as the next support zone for the stock.

On Friday, the stock of L&T Technology Services closed at Rs 1,620 per share, down by 3.27 per cent. The stock had opened at Rs 1,653 per share and hit an intraday high of Rs 1,668.20 and a low of Rs 1,576.30 per share on NSE.