Tata Elxsi forms Identical Three Crows pattern

The stock of Tata Elxsi Limited has formed an Identical Three Crows like candlestick pattern on the daily timeframe.

Identical Three Crows candlestick is a bearish reversal pattern. The pattern is seen after an uptrend. It consists of three large consecutive declining bearish candles. This pattern usually indicates a weakness in an established uptrend as well as the potential emergence of a downtrend.

Along with this bearish formation, the stock, after a span of almost one month, has closed below its crucial short-term moving averages i.e. 8-day EMA and 13-day EMA. Among the momentum indicators, the 14-period daily RSI has cooled off after touching the zone of 83-84 and at present, its reading is 55.69. The RSI is trading below its 9-day average and it is in a falling mode, which indicates a further downside momentum. Further, the stochastic oscillator is also suggesting bearish momentum as the fast stochastic is trading below its slow stochastic line.

Going ahead, the stock has strong support in the zone of Rs 1,440-Rs 1,435, while on the higher side; a major resistance is placed in the zone of Rs 1,680-Rs 1,710 level.

On Thursday, the stock of Tata Elxsi closed at Rs 1,508.80 per share, down by 4.78 per cent. The stock had opened at Rs 1,571.80 per share and hit an intraday high of Rs 1,571.80 and a low of Rs 1,501.25 per share on NSE.