IRB forms Three White Soldiers pattern

The stock of IRB Infrastructure Developer Limited has formed a three white soldiers candlestick pattern on the daily timeframe. Three white soldiers is a bullish candlestick pattern, which is used to predict the reversal of the current downtrend in a pricing chart. The pattern consists of three long body bullish candles that trend upwards like a staircase with each opening above the previous days open and preferably at the middle of the previous candle. The pattern helps to confirm that a bear market has ended and market sentiments have turned positive.

Along with this bullish formation, the stock has also managed to close above its weekly pivot and short-term moving averages, that is, 20-day EMA and 50-day EMA. Among the momentum indicators, the 14-period daily RSI is currently quoting at 57.34 and is trading above its 9-day average. The daily stochastic oscillator is also suggesting some bullish momentum as %K is above the %D. The daily MACD stays bullish, as it is trading above its zero line. Moreover, a positive divergence was spotted on the weekly timeframe on the RSI, which indicates limited downside. A positive divergence occurs when the price is making a lower low while the RSI forms a higher low.

Going ahead, the stock has strong support in the zone of Rs 66.30- Rs 65 level while on the higher side, the short term resistance is placed in the zone of Rs 79.50- Rs 80 level.

On Tuesday, the stock of IRB Infrastructure Developer closed at Rs 74.60 per share, surged by 4.41 per cent from its previous close. The stock opened at Rs 71.45 per share and hit an intraday high of Rs 75.45 and a low of Rs 70.80 per share on the BSE.