Technical Bits: Reliance forms bullish engulfing candle

The stock of Reliance Industries formed bullish engulfing candle near upward sloping trendline support, which suggests bulls are taking control near the short-term support zone. The bullish engulfing candlestick pattern is considered to be a bullish reversal pattern and usually occurs at the bottom of a downtrend.

On Tuesday, the stock has managed to close above its weekly pivot and short-term moving average, i.e. 8-day EMA and 13-day EMA. The 14-period RSI took support at 37 level historically many times and this time also it bounced exactly from the same level. The daily MACD stays bullish as it is trading above its zero line. Moreover, the Ichimoku chart on 60-minute time frame is clearly giving a positive view as it closed above the Ichimoku cloud, KS and TS lines.

Going ahead, the zone of Rs. 1,283-Rs. 1,286 is crucial resistance for the stock as it is the confluence of downward sloping trendline resistance and 20-day EMA level. On the downside, the Tuesday’s low of Rs. 1,245.50 is likely to act as crucial support for the stock.

On Tuesday, the stock of Reliance Industries closed at Rs. 1,283 per share, surged by 2.47 per cent. The stock opened at Rs. 1,248.95 per share and hit an intraday high of Rs. 1,283.50 and a low of Rs. 1,245.50 per share on NSE.