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  • Jun 13, 2023 - SRF Share Price: Bullish Momentum Abruptly Gives Way to Bearish Rout

SRF Share Price: Bullish Momentum Abruptly Gives Way to Bearish Rout

Jun 13, 2023

SRF share price plummeted a staggering 10% in just three trading sessions on the National Stock Exchange (NSE), plunging from Rs 2,576 to Rs 2,320.

SRF Daily Price Chart

 

Decoding the Chart Patterns...

On the daily chart, a significant shift from a bullish to a bearish trend is visible as the stock broke through both the support zone (marked red) and the rising trendline (marked black).

However, the medium-term and long-term trends remain bullish, with a potential support zone acting as a key factor.

Additionally, although the price is currently trading below the 200-day exponential moving average (200 DEMA), a death cross has not been confirmed.

Short-Term Trend

The short-term chart of SRF indicates a notable change in the prevailing trend. The support zone, highlighted in red, has been breached, indicating a weakening of bullish momentum.

Additionally, the stock has also broken below the black rising trendline, confirming the shift towards a bearish outlook.

The short-term bearish breakdown is substantiated by a bearish range shift observed on the Relative Strength Index (RSI).

Medium-Term and Long-Term Trends

Despite the bearish developments on the short-term chart, the medium-term and long-term trends for SRF remain bullish.

The support zone of Rs 1,975 to Rs 2,100 (trendline marked in blue) plays a crucial role in maintaining the overall positive trend.

This support zone has not been violated. This suggests it could provide a significant level of support to prevent further downside pressure.

The 200 DEMA at play

It's worth noting that the stock price is currently trading below the 200 Day Exponential Moving Average (200 DEMA), which is often considered a bearish signal.

It's important to highlight that a death cross that typically indicates a more prolonged bearish period, has not yet occurred.

This suggests that while the short-term outlook has turned bearish, the long-term trend may still have the potential for recovery.

Conclusion

In summary, the short-term chart reveals a significant shift from a bullish to a bearish trend. The break of the support zone and the rising trendline are strong indications of weakening momentum.

The medium-term and long-term trends remain bullish, supported by the unbroken support zone of 1,975-2,100. While the stock is currently trading below the 200 DEMA, a death cross has not been confirmed.

Traders should closely monitor the price action and further developments to determine if the bearish trend continues or if a potential recovery takes place in the medium to long term.

Today, SRF share price opened the day at Rs 2,357 against its previous close of Rs 2,338.

It has a 52-week high of Rs 2,864 touched last year in September 2022 and a 52-week low price of Rs 2,002 touched on 6 July 2022.

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Investment in securities market are subject to market risks. Read all the related documents carefully before investing

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Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...

Brijesh Bhatia

Brijesh Bhatia Research Analyst and expert chartist, is the editor of Alpha Wave Profits. Fully committed to his craft, Brijesh has mastered the art of making money by trading using technical analysis. Brijesh has an MBA from ICFAI and 16 years of experience in India's financial markets. He began his career on Dalal Street as commodities dealer and it wasn't long before he developed his own unique trading system. Brijesh worked on his trading system until it could be expected to deliver 5 units of return for every unit of risk.

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