Ethanol stock indicates a potential near-term bearish reversal: Check the details

Synopsis:Triveni Engineering and Industries Ltd has formed an Evening Star pattern on the 1-hour chart, indicating a potential near-term bearish reversal.

The appearance of an Evening Star pattern after a sustained uptrend highlights emerging selling pressure near higher levels. A breakout below the pattern supports a potential bearish reversal.

The Evening Star pattern indicates a potential trend reversal following a prior advance, with prices showing hesitation near higher levels before sellers regain control. A decisive breakdown below the pattern’s support reflects strengthening selling pressure, signalling a loss of buyer dominance and the possibility of building downside momentum in Triveni Engineering and Industries Ltd.

On Thursday, Triveni Engineering and Industries Ltd formed an Evening Star pattern on the 1-hour chart, reflecting waning buying momentum after the recent up move. The pattern signals a potential near-term bearish reversal, as increased selling pressure near higher levels suggests that traders may turn cautious. Sustained trading below the pattern’s support could reinforce the downside bias and confirm the reversal signal.

In an Evening Star formation, downside targets are typically identified using immediate support levels below the pattern’s breakdown point. Traders often use these zones to book partial or full profits on short positions, while closely monitoring price action for follow-through selling or early signs of downside exhaustion.

Indicator Confirmation

RSI: The daily RSI indicates bearish momentum, as it fell from 52.42 in the previous trading session to 48.20 on Thursday, confirming the bearish reversal.

MACD: On 1-hour time frame, the Blue MACD line crossed below the orange signal 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 downtrend, accompanied by a slight drop in buying volume.

Implications

The emergence of an Evening Star pattern points to potential downside ahead for Triveni Engineering and Industries Ltd. A sustained close below the key Rs 352 level, preferably with rising selling volumes, would confirm the reversal and reduce the risk of a false signal. With the earlier support around Rs 352 now acting as immediate resistance, failure to move above this zone would reinforce bearish momentum in the near term.

About the stock

Triveni Engineering & Industries Limited is a diversified industrial conglomerate with strong presence in sugar, ethanol, power transmission and water & wastewater solutions. It is one of the India’s largest integrated sugar and ethanol manufacturers, operating multiple sugar mills, distilleries and co-generation power plants. The company is also a leading supplier of engineered gear solutions and provides end-to-end sustainable water management services across industries.

Over the past month, Triveni Engineering & Industries Limited has declined by 9.80%, indicating sustained weakness. The stock has also fallen 5.01% over the last six months and remains down 12.74% on a year-on-year basis. For more such technical stock ideas, clickhereto view our research page.

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