CAIRN on NSE settled at 162.10 and registered 7.96% gains
for the day. Provided is weekly chart of CAIRN in which a strong down trend can
be seen clearly. Recently, stock has changed its dynamics on weekly chart and a
long term bottoming formation can be seen clearly on MACD indicator. Inverse
head and shoulder pattern has emerged in this stock and this week stock has
broken out above the Neckline of this bullish reversal pattern. MACD is now testing its signal line near centre
line and MACD histogram is confirming MACD divergence that suggests increasing
bullish momentum. Stock has formed a base above 20 weeks EMA which is itself a
bullish trigger on short term time frame. However, 20 weeks EMA is staying
below 50 weeks EMA but price has climbed above 50 weeks EMA that suggests
increasing bullish momentum in this stock.
Inverse head and shoulder bullish reversal has emerged after 16 months
of strong down trend that increases the potential of this pattern. However,
pattern has a down sloping neckline which is less reliable than flat or up
sloping neckline while forming inverse head and shoulder pattern but big price
moves from right shoulder shows increasing buying interest in this stock.
Any
decline between 150-130 can be used for accumulation for a price target of
219-227-260 in short to midterm. Whereas stability below 120 will invalidate this
pattern.
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