SRF Limited forms bullish engulfing candle on weekly scale

SRF Limited is trading above its 20-day EMA (2080.10), 50-day EMA (2055.15), 100-day EMA (2013.95) and 200-day EMA (1957.15), which indicates stock is in medium-long term uptrend. Recently, after taking support near 50-week SMA, the stock bounces sharply and forms bullish engulfing candle on weekly scale, which suggests bulls were in dominant position. However, on daily time frame, near downward sloping trendline stock witnessed some profit booking.

The 14-period RSI on daily time frame was quoting at 65.94, which suggest bullish bias. According to the MACD analysis on daily chart, there is centreline bullish crossover, which is positive for stock.

In the near-term, the zone of Rs. 2,280- Rs. 2,300 is likely to act as short-term resistance as downward sloping trendline is placed there.  A follow- through move above this level would lead to an extension of the pull-back toward Rs. 2,400, followed by Rs. 2,460. While on the downside, 21-day EMA is likely to act as strong support, which is currently quoting around Rs. 2,078.70.

On Friday, the stock of SRF closed at Rs. 2,220.60 per share, dipped by 0.20 per cent. The stock opened at Rs. 2,200 per share and hit an intraday high of Rs. 2,240 and a low of Rs. 2,198.80 per share on BSE.