Century Textiles & Industries form piercing line pattern

The stock of Century Textiles & Industries Limited has formed a piercing line candlestick pattern on the daily scale. The piercing line candlestick pattern is considered to be a bullish reversal pattern and usually occurs at the bottom of a downtrend.

The leading indicator, 14-period daily RSI is currently quoting at 25.25. The RSI is trading above its nine-day average and it is in rising mode, which indicates a further upward momentum. The daily stochastic oscillator is also suggesting some bullish strength as per cent K is above the per cent D. Moreover, a positive divergence was also spotted at the daily time frame on the RSI, which indicates a limited downside. A positive divergence occurs when the price is making a lower low while, the RSI forms a higher low.

The Ichimoku chart on 30-minute time frame is clearly giving a positive view as it closed above KS and TS lines. Another important aspect is that the KS line crossed above the TS line, which is also a bullish sign. 

Going ahead, if the stock sustains above Wednesday’s session high of Rs 265.65 and trades convincingly above this level then, there is a high probability of Wednesday’s low of Rs 218.60, becoming a temporary bottom for the stock.

On Wednesday, the stock of Century Textiles & Industries was trading at Rs 256.25 per share, surged by 12.89 per cent. The stock opened at Rs 221 per share and hit an intraday high of Rs 265.65 and a low of Rs 218.60 per share on NSE.