BSE Shows Double Top Pattern: Check the Chart and Details

Synopsis: BSE Ltd has exhibited a bearish reversal pattern on its 1‑hour chart, signalling potential near-term downward momentum. 

BSE Ltd, after experiencing a prolonged uptrend in recent trading sessions, has formed a double top pattern in the 1-hour time frame, signalling a potential bearish reversal. 

The double top is a classic bearish reversal pattern, characterised by two peaks formed at roughly the same price level, separated by a moderate pullback. This formation suggests that buying pressure is weakening and signals a potential shift from an uptrend to a downtrend once the price breaks below the support level (the neckline).

On Monday, the stock broke below the Rs 2800 support neckline after forming a Double top pattern. This breakdown, accompanied by persistent selling volumes, confirms near-term bearish momentum.

The downside target for this pattern is usually measured by taking the nearest support levels as a reference and projecting them as potential objectives. As the price approaches these levels, traders often look to book profits or reassess their positions.

Indicator Confirmation

• RSI: The daily RSI indicates bearish momentum, as it declined from ~57 in the previous trading session to ~50.57 on Monday, confirming the continuation of the downtrend.
• MACD: The orange signal line crossed above the Blue MACD line, with the histogram turning red, indicating bearish momentum.
• Moving Averages: On the 1-hour time frame, the 5-day moving average has crossed below the 9-day moving average, further confirming a bearish trend.
• Price Volume Trend: The Price Volume Indicator confirms the trend, supported by a decline in buying volume.

Implications

This bearish double-top breakdown suggests the potential for further downside momentum. A decisive close below the neckline support, ideally supported by higher volumes, is needed to confirm the move and minimise the risk of a false breakdown. On the upside, resistance is likely around Rs 2800, while sustained trading below the breakdown zone would signal continued bearish pressure.

About the stock

Founded in 1875, BSE Ltd is Asia’s oldest stock exchange and one of India’s leading exchange groups. With over 150 years of contribution to India’s capital markets, BSE became the country’s first listed stock exchange in 2017. It supports a market capitalisation exceeding USD 5.27 trillion and serves over 223 million investors across 721 cities, backed by a strong ecosystem of 1,250+ members, 48 registered mutual funds, and 81,000+ distributors. Over the past month, BSE Ltd delivered a 3.72% return, while in the last six months, it achieved a 5.99% return. Over the past year, it provided a 34.07% return. For more such technical stock ideas, Click here to view our research page.

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