Thermax bounces from upward sloping trendline support

Considering the weekly time frame, the stock of Thermax limited has bounced back from the edge of the upward sloping trendline support that was formed by connecting the swing lows since May 2016. The reversal from the support is further justified with strong volumes. Additionally, the stock has formed a reversal Piercing line candlestick pattern, which suggests bull is taking control near long-term support. The piercing line candlestick pattern is considered to be a bullish reversal pattern and usually occurs at the bottom of a downtrend.

Among the momentum indicators, the 14-period daily RSI is currently quoting at 44.78. It is trading above its 9-day average and it is in the rising trajectory, which suggests bullish bias. The fast stochastic line is also trading above its slow stochastic line. The daily MACD stays bullish as it is trading above its zero line.

Going ahead, the 8-day EMA is likely to act as an immediate support which is currently quoting at Rs 1,000.70 level. While the previous week’s low of Rs 975 is likely to act as a major support for the stock. On the higher side, the level of Rs 1,040, followed by Rs 1,055, would be seen as the next resistance zone for the stock.