Technical Bits: KEI Industries forms bullish engulfing candle

The stock of KEI Industries has formed a bullish engulfing candle on the weekly time frame near the upward sloping trendline support, which suggests bulls are taking control near the short-term support zone. The bullish engulfing candlestick pattern is considered to be a bullish reversal pattern and usually occurs at the bottom of a downtrend.

The major trend of the stock is bullish as it is trading above its weekly pivot and above its long-short term moving averages, i.e. 20-week, 50-week, 100-week and 200-week EMAs and these moving averages are exactly in an ascending order, which suggests that the trend is strong. Among the momentum indicators, the 14-period weekly RSI is currently quoting at 59.12. The RSI is trading above its 9-week average and it is in rising mode, which indicates further upward momentum. The weekly stochastic oscillator is also suggesting some bullish strength as %K is above the %D. Moreover, the Ichimoku chart on daily time frame is clearly giving a positive view as it closed above the KS, TS lines and Ichimoku cloud.

Going ahead, the stock has strong support in the zone of Rs. 458-456, while on the higher side, the major resistance is placed in the zone of Rs. 492-495 level.

On Friday, the stock of KEI Industries closed at Rs. 488.90 per share, surged by 3.70 per cent. The stock opened at Rs. 471.45 per share and hit an intraday high of Rs. 491 and a low of Rs. 471.05 per share on BSE.