Nucleus Software Exports forms bullish engulfing candle

The stock of Nucleus Software Exports Limited had formed a reversal hammer candlestick pattern as of March 27, 2020, and thereafter, surged sharply. The stock has witnessed over 375 per cent upside momentum from the low of Rs 156.35, which was registered on March 25, 2020, while it gave nearly 117 per cent returns from year to date. However, the stock had formed a reversal bearish engulfing candlestick pattern as on October 07, 2020, and thereafter, witnessed a correction. The correction was nearly 23 per cent from the high of Rs 755.

On Tuesday, the stock has formed a bullish engulfing candlestick pattern on the daily timeframe. The bullish engulfing candlestick pattern is considered to be a bullish reversal pattern and usually occurs at the bottom of a downtrend.

Currently, the stock is trading above its medium and long-term moving averages, i.e. 50-day EMA, 100-day EMA, and 200-day EMA level. Talking about the indicators, the 14-period RSI on the daily timeframe has bounced from the zone of 43-44 and currently, it is quoting at 49.11. The RSI is trading below its 9-day average line but the stochastic oscillator has given a positive crossover in the oversold region, which suggests a further bullish momentum.  

Going ahead, if the stock sustains above Tuesday’s session high of Rs 618.05 and trades convincingly above this level, then there is a high probability that Tuesday’s lowest point of Rs 584 would become a temporary bottom for the stock.

On Tuesday, the stock of Nucleus Software Exports surged by 4.71 per cent and closed at Rs 616.35 per share. The stock opened at Rs 585.20 per share and hit an intraday high of Rs 618.05 and a low of Rs 584 per share on NSE.