Voltas forms record session count pattern; bulls may take a breather

The stock of Voltas Limited has witnessed over 28 per cent upside from the low of Rs 957, which was registered on August 27, 2021. During this northward journey, the stock has marked the sequence of higher highs & higher lows for 11 consecutive trading sessions, which resulted in the formation of a bullish record session count candlestick pattern thereby, further suggesting that the bulls may take a breather.    

This is an extremely rare pattern and usually occurs at the top of an uptrend. Generally, we rely on the typical momentum indicators or oscillators for recognising an overbought and oversold condition of the stock. However, this Japanese candlestick pattern gives us a unique way to recognise the time when the momentum is about to wane out.    

The momentum indicators are also supporting the same phenomenon. The daily RSI, as well as the stochastic, are in an extremely overbought zone. The daily RSI is currently quoting at 85.18, which is the highest level since May 2009. Interestingly, since the last five trading sessions, the price has marked higher highs but the Commodity Channel Index (CCI) has not reached the prior highs.   

These abovementioned factors are giving some suspicious vibes about the continuity of vertical rise. Hence, Wednesday’s session is going to be an important one to watch out for the stock. Any sustainable move or close below the prior day’s low may trigger some profit booking.