HDFC forms bullish engulfing candle

The stock of Housing Development Finance Corporation Limited has formed a bullish engulfing candlestick pattern on the weekly timeframe. The bullish engulfing candlestick pattern consists of two real bodies of opposite colours. The second day’s body completely engulfs the previous day's body. A large bullish candle suggests this was a sudden and decisive shift to the bullish sentiment.

Along with this bullish formation, the stock has also managed to close above its weekly pivot and short-term moving averages, i.e. 13-day EMA and 20-day EMA. The positive crossover on 14-period daily RSI and stochastic supports the overall bullish price structure. Moreover, a positive divergence is clearly visible between the daily RSI, daily stochastic and the stock price movement, which suggests a limited downside.

Going ahead, if the stock sustains above Friday’s session high of Rs 1,676.35 and trades convincingly above this level, then there is a high probability that Tuesday’s lowest point of Rs 1,486 would become a temporary bottom for the stock.

On Friday, the stock of Housing Development Finance Corporation closed at Rs 1,667 per share, surged by 2.67 per cent. The stock opened at Rs 1,615.90 per share and hit an intraday high of Rs 1,676.35 and a low of Rs 1,590.90 per share on NSE.