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Bata India: Momentum indicators suggest stock is overbought

Vinayak Gangule
/ Categories: DSIJ Mindshare
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Bata India: Momentum indicators suggest stock is overbought

Bata India Limited is trading above its 20-day EMA (1186.40), 50-day EMA (1137.50), 100-day EMA (1077) and 200-day EMA (988.45), which indicates the stock is in the medium-long term uptrend. After giving a breakout of pennant pattern on February 13, 2019, the stock surged sharply. At present, the momentum indicators suggest an overbought position, but a reversal is yet to be confirmed. 
Among the momentum indicators, the 14-period day RSI cooled-off after touching 76.01 levels and at present it is quoting around 70.20. The fast stochastic is still trading above its slow stochastic line but a negative divergence is developing. However, in the near-term, the pennant breakout day's low of Rs. 1198.20 is likely to act as major support for the stock, failure to hold this support would lead to further correction up to the level of Rs. 1,165. While on the upside, above 52-week high level, the stock is likely to extend its northward journey. 
On Friday, the stock of Bata India Limited closed at Rs. 1,254.45 per share, dipped by 0.28 per cent. The stock opened at Rs. 1,260 per share and hit an intraday high of Rs. 1,270.70 and a low of Rs. 1,239.25 per share on BSE.

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