Stock Name: Bata India
Ticker name: BATAINDIA
Current market price: Rs. 910
Target downside levels: 848, 802
The hourly chart of Bata India is giving weak signals!
The above picture is pretty much self explanatory. There are 3 specific evidences which indicate that Bata India might take a dip in the upcoming trading sessions. Let\’s look at them technically.
1) The dark blue line is the 200 EMA on the hourly chart of Bata. It has acted as the resistance zone on several instances as highlighted on the chart with blue circles. In technical analysis, moving averages tend to act as very important support/resistance zones across time frames and are used by trades as entry levels.
2) Another factor supporting our bearish view on Bata India is the fact that the trendline had been breached in the previous correction. This indicates underlying weakness even if the price bounced up again. Broken trendlines should be taken very seriously as all major corrections are first signalled with trendline breaches.
3) RSI – our momentum indicator, has reached the oversold zone of 60 and turned lower without crossing to the 60 to 80 zone which is the bullish zone for up trending stocks. It has been observed that a stock which is in the bear trend, reached an RSI level of almostly 60 in pull backs and upside corrections. Many traders use the RSI level of 60 to enter into fresh shorts in a stock which is displaying other signs of weakness and forming lower lows in price on charts of a higher time frame.
This is all I have on the technical outlook of Bata India\’s chart. If you have additional insights or even opposing views, please feel free to reach out and we can discuss! Healthy learning!
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