Here’s what to look for in Maruti Suzuki chart
Considering the daily timeframe, the stock was trading in a rising channel since September 2020. From the low of Rs 6,270.15, which was registered on September 24, 2020, the stock has witnessed nearly 33 per cent upward momentum. However, the stock has formed a shooting star candlestick pattern as of January 12, 2021, and thereafter, entered into a corrective phase.
On Friday, the stock has given a lower trendline breakdown of the rising channel, which suggests a further bearish momentum. This breakdown is confirmed by the above 50-day average volume. Additionally, the stock has formed an opening bearish Marubozu candle on the breakdown day. The opening bearish Marubozu candle has no shadow extending from the open price end of the body. The bearish Marubozu candle indicates an extreme bearishness.
Further, the stock has also managed to close below its crucial 100-day EMA level. Among the momentum indicators, the 14-period daily RSI has also given an upward sloping trendline breakdown, which is a bearish sign. The daily MACD is below the zero line and the signal line. The MACD histogram suggests a pickup in the downside momentum.
The derivatives data is also suggesting a short build-up in the stock. On Friday, February series stock future saw 3,90,300 addition of open interest, which is 16.82 per cent addition in the open interest. It indicates that there is a short build-up in the market. January month’s current open interest is 27,10,100. For January expiry, the open interest wise put-call ratio (PCR) is at 0.37.
Going ahead, the 200-day EMA is likely to act as crucial support for the stock, which is currently quoting at Rs 6,957 level. While on the upside, the 50-day EMA is likely to act as immediate resistance for the stock.