Muthoot Fina-lly Completes A “Bearish ABCD” Pattern
Targets : 403-349 Sell range : 450-460 Stoploss : 511 Duration : 4-5 weeks
Outlook :
The stock is in strong uptrend as it continues to conquer uncharted territories in a rising peak and trough manner. Stock has jumped by more than 50% in last Six Month from its lowest level of 265.0 dt 26-Dec-16.
The key observation on the price chart of Muthoot Finance is that the stocks gradual upmove of the last 5-6 months seems to have completed, as the stock price has started to show weakness from the highs during this week.
Initial evidence of a beginning of declines is visible, as the stock price has lost momentum near Rs 482-480 levels (161.8% of prior corrective move from Rs 406.80 (August 2016) to the levels of Rs 262 (December 2016)), thus forming CD Leg of a Bearish Harmonic setup known to be “Bearish ABCD” Pattern.
Further, Bearish engulfing Candlestick pattern was formed by the stock on 21/06/2017 and Three outside down Candlestick pattern was formed as on 22/06/2017 on the Daily charts, whereas on weekly charts “Bearish Engulfing” Candlestick pattern was formed (shown in red circular object) which is indicating a bearish momentum in coming weeks..
Weekly 14 period’s RSI is in downtrend forming a “Regular Bearish Divergence” with Lower highs and is seen crossing below 70 levels thus supports the negative bias in stocks price.
Based on the above technical observation, we expect the stock price to head towards Rs 403-349 in the coming months, as it is the 38.2% and 61.8% retracement levels respectively (minimum said targets for the above said pattern), Hence advise to sell at CMP and also at rallies. Entry and EXIT levels are mentioned above.
Outlook :
The stock is in strong uptrend as it continues to conquer uncharted territories in a rising peak and trough manner. Stock has jumped by more than 50% in last Six Month from its lowest level of 265.0 dt 26-Dec-16.
The key observation on the price chart of Muthoot Finance is that the stocks gradual upmove of the last 5-6 months seems to have completed, as the stock price has started to show weakness from the highs during this week.
Initial evidence of a beginning of declines is visible, as the stock price has lost momentum near Rs 482-480 levels (161.8% of prior corrective move from Rs 406.80 (August 2016) to the levels of Rs 262 (December 2016)), thus forming CD Leg of a Bearish Harmonic setup known to be “Bearish ABCD” Pattern.
Further, Bearish engulfing Candlestick pattern was formed by the stock on 21/06/2017 and Three outside down Candlestick pattern was formed as on 22/06/2017 on the Daily charts, whereas on weekly charts “Bearish Engulfing” Candlestick pattern was formed (shown in red circular object) which is indicating a bearish momentum in coming weeks..
Weekly 14 period’s RSI is in downtrend forming a “Regular Bearish Divergence” with Lower highs and is seen crossing below 70 levels thus supports the negative bias in stocks price.
Based on the above technical observation, we expect the stock price to head towards Rs 403-349 in the coming months, as it is the 38.2% and 61.8% retracement levels respectively (minimum said targets for the above said pattern), Hence advise to sell at CMP and also at rallies. Entry and EXIT levels are mentioned above.
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