Manappuram forms Three Inside Down pattern

The stock of Manappuram Finance Limited has formed a Three Inside Down candlestick pattern on daily time frame. The Three Inside Down pattern represents a confirmation of the Bearish Harami Pattern, which indicates that the forecast is successful.

In this pattern, first candle is a long bullish candle, which closes near its high. Second candle is a small bearish candle, which gaps away from the first candle and closes inside the body of the first candle, thus creating a harami pattern. Third candle exceeds the lows of the first two candles.

Along with this bearish formation, the stock of Mannapuram has also closed below its weekly pivot and short term moving average, i.e. 8-day EMA. The 14-period daily RSI is currently quoting at 57.51 and it is trading below its 9-day average. The stochastic oscillator is also suggesting some bearish momentum as %K is below the %D. Moreover, the Ichimoku chart on 60-minute time frame is clearly giving a negative view as it closed below the KS and TS lines. Another important aspect is the KS line crossed under the TS line, which is also a bearish sign.

In the near term, the zone of Rs. 144-Rs. 145 is likely to act as major resistance for the stock as horizontal resistance is placed in that region.  While on the downside, any sustainable move below Tuesday's low would result in further correction, up to the level of Rs. 128, and followed by Rs. 119.35.

On Tuesday, the stock of Manappuram Finance Limited closed at Rs. 134.40 per share, down by 4.78 per cent. The stock opened at Rs. 141.15 per share and hit an intraday high of Rs. 141.85 and a low of Rs. 132.45 per share on BSE.