Ultratech Cement forms morning doji star pattern

The stock of Ultratech Cement Limited has formed a morning doji star candlestick pattern on the daily timeframe. The morning doji star is a reversal candlestick pattern, which is bullish and appears at the end of a downtrend. It is a complex pattern made of three candles, with the first candle being bearish, the second one being indecisive and the third one being bullish.

The buying volumes are higher than the last four days’ fall, which indicates that it is accumulated by smart investors at a lower level. Among the momentum indicators, the 14-period RSI is currently quoting at 37.61 levels and it has given a positive crossover, suggesting a positive breath in the stock. On daily time scale, the know sure thing (KST) has also given a bullish crossover. Moreover, the positive divergence is clearly visible between the daily stochastic and stock price movement, which suggests limited downside.

Going ahead, the zone of Rs 3,655-3,720 is likely to act as an immediate hurdle for the stock since it is the confluence of 38.2 per cent Fibonacci retracement of its recent downward move (Rs 4,754.10-Rs 2,955.60) and 13-day EMA level. While on the downside, Thursday’s low (doji candles’ low) of Rs 2,955.60 will be a major support for the stock.

On Friday, the stock of Ultratech Cement closed at Rs 3,580.45 per share, surged by 13.01 per cent. The stock opened at Rs 3,200 per share and hit an intraday high of Rs 3,657.20 and a low of Rs 3,144.70 per share on BSE.