Shriram Transport Finance forms piercing line pattern

The stock of Shriram Transport Finance Company Limited has formed a piercing line candlestick pattern on the weekly time frame. The piercing line candlestick pattern is considered to be a bullish reversal pattern and usually, occurs at the bottom of a downtrend.

After a span of almost one month, the stock has managed to successfully close above its crucial short-term moving averages i.e. eight-day EMA and 13-day EMA. Among the momentum indicators, the 14-period daily RSI, is currently quoting at 40.64. The RSI is trading above its nine-day average and it is in rising mode, which indicates a further upward momentum. Interestingly, the daily stochastic has given a breakout of falling wedge pattern, which is also a bullish sign. Moreover, it has also given a buy signal in Martin Pring’s short-term KST set up.

Going ahead, we expect the bias to remain positive as long as the stock sustains above Monday’s low of Rs 440 level. On the higher side, the level of Rs 815, followed by Rs 900, would be seen as the next resistance zone for the stock.

On Friday, the stock of Shriram Transport Finance Company Ltd closed at Rs 724.45 per share, surged by 11.03 per cent. The stock opened at Rs 670 per share and hit an intraday high of Rs 815 and a low of Rs 670 per share on BSE.