Can Fin Homes forms three inside down pattern

The stock of Can Fin Homes Ltd has formed a ‘three inside down’ candlestick pattern on the daily timeframe. The three inside down pattern represents a confirmation of the bearish harami pattern, which indicates that the forecast is successful.

In this pattern, the first candle is a long bullish candle, which closes near its high. The second candle is a small bearish candle, which gaps away from the first candle and closes inside the body of the first candle, thus creating a bearish harami pattern. The third candle exceeds the lows of the first two candles.

Among the momentum indicators, the 14-period daily RSI cooled off after touching the zone of 75-76 and at present, its reading is 60.37. The RSI is trading below its nine-day average and it is in a falling mode, which indicates a further downside momentum. The daily stochastic oscillator is also suggesting some bearish momentum as per cent K is below the per cent D. 

Further, the Ichimoku chart on the 60-minute timeframe is clearly giving a negative view as it closed below the KS and TS lines. Another important aspect is that the KS line crossed under the TS line, which is also a bearish sign.

In the near term, the zone of Rs 448 -Rs 460 is likely to act as a major resistance for the stock. While on the downside, the zone of Rs 401-Rs 399 is likely to act as short-term support as it is the confluence of 61.8 per cent retracement level of its prior upward move (Rs 364.10-Rs 459.50) and the 20-day EMA level.