SBIN forms Bearish Engulfing pattern

The stock of State Bank of India (SBI) formed a Bearish Engulfing candlestick pattern on the weekly timeframe. The Bearish Engulfing Candlestick pattern is considered to be a bearish reversal pattern and usually occurs at the top of an uptrend.

With this bearish formation, the stock has also managed to close below its weekly pivot and short term moving averages, that is, 13-day EMA and 20-day EMA. The reversal was confirmed by the above 50-day average volumes. The leading indicator, 14-period daily RSI, is currently quoting at 48.30 and it has given a breakdown of upward sloping trendline support. The stochastic oscillator is also suggesting some bearish momentum as %K is below the %D. Moreover, on a weekly time scale, the Know Sure Thing (KST) has given bearish crossover. The Ichimoku chart on a 60-minute time frame is giving a negative view as it closed below the KS, TS lines and Ichimoku cloud. Another important aspect is the KS line passed under the TS line, which is also a bearish sign. 

Going ahead, the 50-day EMA will be the immediate support for the stock, which is currently placed at Rs. 312 level. While on the upside, Friday's high of Rs. 337.65 will be a major hurdle for the stock.

On Friday, the SBI stock closed at Rs. 318.20 per share, registering a dip of 5.35 per cent. The stock opened at Rs. 336.70 per share and hit an intraday high of Rs. 337.65 and a low of Rs. 318 per share on NSE.