Bajaj Finserv forms Doji candle on weekly scale

The stock had witnessed downward sloping trendline breakout at around Rs. 6,350 level on February 25, 2019 and thereafter the stock had seen almost 12 per cent upward move. At present, the stock has formed a doji candle on the weekly scale. This suggests that the bulls are tired. However, in the next week, we may get confirmation of a near-term reversal.

A doji is formed when the opening price and closing price are equal. If the doji occurs alone, it is a signal that there is indecision and must not be ignored.

The 14-period day RSI cooled off after touching 78 zone and at present its reading is 73.33. The fast stochastic line is trading below its slow stochastic line, which suggests a pause in trend. Moreover, there has been a negative divergence between the RSI, stochastic and the index price movement, which suggests limited upside.

However, in the near term, the zone of Rs. 6,700- Rs. 6,800 is likely to act as major support as short-term moving averages, i.e. 13-day EMA and 20-day EMA is placed in that region. While on the upside, doji candles high of Rs. 7,080 level will be a major hurdle for the near-term.

On Friday, the stock of Bajaj Finserv Limited closed at Rs. 6,957.50 per share, surged by 0.19 per cent. The stock opened at Rs. 6,969 per share and hit an intraday high of Rs. 7,062.25 and a low of Rs. 6,927.70 per share on BSE.