Technical Bits: Apollo Tyres forms piercing line pattern

Technical Bits: Apollo Tyres forms piercing line pattern

Vinayak Gangule
/ Categories: Trending

The stock of Apollo Tyres has formed a piercing line candlestick pattern on the weekly scale. The piercing line candlestick pattern is considered to be a bullish reversal pattern and usually occurs at the bottom of a downtrend.


The piercing line candlestick pattern is a two candlestick pattern. The first candle is red, which supports the downtrend and the second candle is a long green candle, which opens below the close of the previous candle and then closes above the midpoint of the preceding red candle. This action causes concern to the bears and a potential bottom has been made.


On Friday, the stock has managed to close above its weekly pivot level. The reversal was confirmed by the above 50-week average volumes. Among the momentum indicators, the 14-period daily RSI is currently quoting at 45.30. The RSI is trading above its 9-day average and it is in rising mode, which indicates further upward momentum. The daily and weekly stochastic oscillator is also suggesting some bullish strength as %K is above the %D. The daily MACD stays bullish as it is trading above its zero line from the last two trading sessions. Moreover, the positive divergence is clearly visible between daily RSI, daily stochastic and stock price movement, which suggests limited downside.


Going ahead, the 8-day EMA is likely to act as immediate support which is currently quoting at Rs. 156.20 level. While the previous week’s low of Rs. 144.05 is likely to act as a major support for the stock. On the higher side, any sustainable move above the level of Rs. 165.10 is likely to open up gates for further rally towards the levels of Rs. 171, followed by Rs. 177.


On Friday, the stock of Apollo Tyres closed at Rs. 162.65 per share, surged by 3.53 per cent. The stock opened at Rs. 157.80 per share and hit an intraday high of Rs. 165.10 and a low of Rs. 157.40 per share on NSE.

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