Technical Bits: BPCL forms Three White Soldiers pattern

Bharat Petroleum Corporation Limited (BPCL) formed the Three White Soldiers candlestick pattern on the daily time frame. The stock is currently trading above its long and short-term moving averages. 

Three White Soldiers is a bullish candlestick pattern that is used to predict the reversal of the current downtrend in a pricing chart. The pattern consists of three long candles that trend upwards like a staircase, each should open above the previous days open, ideally in the middle of the previous candle. The pattern helps to confirm that a bear market has ended and market sentiment has turned positive.

The stock is currently trading above its long and short-term moving averages. Among the momentum indicators, the 14-period day RSI is currently quoting at 54.59 and it is trading above its 9-day average, which indicates further upward momentum. The fast stochastic is also trading above its slow stochastic line. Moreover, the other volume-based indicators like OBV and Money Flow Index are also very strong.

The stock has strong support in the zone of Rs. 356- Rs. 360 as 20-day, 50-day and 100-day EMA is placed in that region. While on the upside any sustainable move above the level of Rs. 375 is likely to open up gates for further rally towards levels of Rs. 390, followed by Rs. 400.

On Friday, the stock of BPCL closed at Rs. 370.95 per share, surged by 3.52 per cent. The stock opened at Rs. 358.25 per share and hit an intraday high of Rs. 372 and a low of Rs. 357.50 per share on BSE.