Technical Bits: Apollo Tyres forms one white soldier pattern
The stock of Apollo Tyres Limited has given downwards sloping trendline breakout on daily time frame along with robust volumes. With this, the stock had formed one white soldier candlestick pattern. The one White Soldier pattern is considered to be a bullish reversal pattern and usually occurs at the bottom of a downtrend.
The one white soldier pattern starts with a long body black candle. The second candle is a long body white candle that opens at or above the previous candles close and then closes near the high of the candle, ending above the high of the previous candle. It depicts that emotionally the downtrend has been damaged. If the following day's prices continue higher, a major reversal of the downtrend has occurred.
The stock after a span of almost two months has managed to successfully close above its crucial short-term moving average i.e. 50-day EMA. The leading indicator RSI is currently quoting at 55.58, and it is trading above its 9-day average. The daily stochastic oscillator is also suggesting some bullish strength as %K is trading above the %D.
Going ahead, the stock has strong support in the zone of Rs. 193-190, while on the higher side, the 100 and 200-day exponential moving averages are placed at Rs. 205.90 and Rs. 217.85, which are likely to act as an immediate hurdle.
On Monday, the stock of Apollo Tyre closed at Rs. 200 per share, surged by 7.87 per cent. The stock opened at Rs. 184 per share and hit an intraday high of Rs. 202.45 and a low of Rs. 184 per share on BSE.