Bharat Petroleum Corporation (BPCL) forms bearish engulfing candle

The stock of Bharat Petroleum Corporation Limited has formed a Bearish Engulfing candlestick pattern on the daily timeframe. The Bearish Engulfing Candlestick pattern is considered to be a bearish reversal pattern and usually occurs at the top of an uptrend.

Along with this bearish formation, the stock has also managed to close below its weekly pivot. Among the momentum indicators, the 14-period daily RSI cooled-off after touching the zone of 73, and at present, its reading is 61.34. The RSI is trading below its 9-day average and is in a declining mode, which indicates a further downside momentum. The stochastic oscillator is also suggesting some bearish momentum as %K is below the %D. Moreover, there has been a negative divergence between the daily stochastic and the index price movement, which suggest limited upside.

Going ahead, if the stock sustains below Tuesday’s session low of Rs 392.10 and trades convincingly below this level, then there is a high probability that Tuesday’s high point of Rs 415 may become a temporary top for the stock.

On Tuesday, the stock of Bharat Petroleum Corporation dipped by 4.41 per cent and closed at Rs 394.65 per share. The stock opened at Rs 415 per share and hit an intraday high of Rs 415 and a low of Rs 392.10 per share on NSE.