Technical Bits: Delta Corp forms bearish engulfing candle

The stock of Delta Corp has formed a bearish engulfing candle after touching downward sloping trendline resistance and it coincides with the double top zone of Rs. 265.90 - 265.50 which suggests bears are taking control near the short-term resistance zone.

 The leading indicator 14-period day RSI is currently quoting at 57.33 and it is tilted southward. The daily MACD stays negative as it is trading below its zero line. Moreover, there has been a negative divergence between the daily RSI and the stock price movement, which suggests limited upside. The Ichimoku chart on 30-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. 249.70- Rs 247.70 is likely to act as major support as the short-term moving averages, i.e. 13-day EMA and 20-day EMA is placed in that region. Failure to hold this support would lead to further correction up to the 200-day EMA, which is currently placed at Rs. 243.45. While on the upside, Friday's high of Rs. 265.50 will be the major hurdle for the stock.

 On Friday, the stock of Delta Corp Limited closed at Rs. 254.70 per share, dipped by 2.43 per cent. The stock opened at Rs. 262.05 per share and hit an intraday high of Rs. 265 and a low of Rs. 253.10 per share on BSE.