Technical Bits: Oberoi Realty forms bearish engulfing candle

The stock of Oberoi Realty Limited has formed a bearish engulfing candle on the daily time frame. Bearish engulfing candlestick pattern is considered to be a bearish reversal pattern and usually occurs at the top of an uptrend.

On Friday, the stock has managed to close below its weekly pivot and short term moving averages, i.e.8-day EMA, 13-day EMA. From the momentum indicators perspective, the 14-period daily RSI is currently quoting at 54.59 and it has given negative crossover. The fast stochastic is also trading below its slow stochastic line. Moreover, the negative divergence is clearly visible between daily RSI, daily stochastic and stock price movement, which suggests limited upside.

In the near term, the 20-day exponential moving average, which is placed around Rs. 575, is likely to act as immediate support, while the 50-day exponential moving average is likely to act as major support, which is currently placed at Rs. 552.80 level. Failure to hold this support would lead to further correction up to the level of Rs.530. While on the upside, the zone of Rs. 640 - 645 will be the major hurdle for the stock.

On Friday, the stock of Oberoi Realty closed at Rs. 583.55 per share, dipped by 6.44 per cent. The stock opened at Rs. 632 per share and hit an intraday high of Rs. 638.70 and a low of Rs. 576 per share on BSE.