Jindal SAW Signals Bearish Price Reversal: Check the details

Synopsis: Jindal SAW has formed a rounding top pattern on its 1-hour chart, indicating potential exhaustion near resistance and signalling a possible near-term bearish reversal.

Jindal SAW, after a sustained upward move in recent trading sessions, has formed a rounding top pattern on the 1-hour time frame, signalling possible trend exhaustion and a potential bearish reversal.

A rounding top is a classic bearish reversal pattern, characterised by a gradual, curved peak that forms after a sustained uptrend. This formation reflects a slow transition from buying pressure to selling pressure, indicating weakening bullish momentum and signalling a potential shift from an uptrend to a downtrend once the price breaks below the key support level.

On Friday, the stock broke below the Rs 181 support neckline after forming a rounding top pattern. This breakdown, accompanied by sustained selling volumes, confirms a near-term bearish shift in momentum.

For a rounding top pattern in Jindal Saw Ltd, the immediate downside targets are typically the nearest support levels below the breakdown zone. Once the price slips below this support, these levels often act as initial objectives, where traders may look to book profits or reassess positions.

(1-hour Timeframe)

Indicator Confirmation

RSI: The daily RSI indicates bearish momentum, as it fell from 64 in the previous trading session to 55 on Friday, confirming the bearish trend.

MACD: On the 1-hour time frame, 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 sharp decline in buying volume.

Implications

This rounding top formation in Jindal SAW suggests the potential for near-term downside pressure. A decisive close below the key support area, ideally accompanied by higher volumes, is required to confirm the bearish reversal and reduce the risk of a false breakdown.

About the stock

Jindal Saw Ltd. is a leading global manufacturer and supplier of iron and steel pipes and pellets, offering a wide range of products, including submerged arc welded pipes, ductile iron pipes, and seamless tubes. The company operates a geographically diversified business model with a strong presence in both domestic and international markets, serving critical sectors such as oil and gas, water supply, and sanitation.

Over the past month, Jindal SAW Ltd recorded a return of 5.25%. The stock declined -21.80% over the last six months and fell 30.42% over the past year.

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