APOLLOTYRE Q1 results seem to have disappointed the market badly. Price crashed over 8% yesterday after results were announced. However, the chart has been indicating some brewing problem in the counter since mid-July, that is more evident now, post facto though!
RSI has been in negative divergence to price (as price was making higher highs, RSI was making lower lows) since late June. As the uptrend channel connecting the highs of June 21st, & July 11th – corresponding to the highs of RSI peaks – was breached on the downside yesterday, the play of the divergence is confirmed. The breach of price also coincided with the simultaneous breaches of the prior low of 412 and the 50 DMA support. The volume yesterday was 5 times the average volume indicating the extreme selling pressure.
A review of the RSI since July 31st shows that it was struggling to enter its bull zone above 60 as the 60-level turned into strong resistance area (yellow highlighted on RSI). Last but not the least, RSI breached its 40 level and entered the bear zone, first time after mid-March. Currently it is trading on 390-400 support area. If Apollotyre breaches 390, next support is around 360-350 level.
No recommendation, only personal observation.
RSI has been in negative divergence to price (as price was making higher highs, RSI was making lower lows) since late June. As the uptrend channel connecting the highs of June 21st, & July 11th – corresponding to the highs of RSI peaks – was breached on the downside yesterday, the play of the divergence is confirmed. The breach of price also coincided with the simultaneous breaches of the prior low of 412 and the 50 DMA support. The volume yesterday was 5 times the average volume indicating the extreme selling pressure.
A review of the RSI since July 31st shows that it was struggling to enter its bull zone above 60 as the 60-level turned into strong resistance area (yellow highlighted on RSI). Last but not the least, RSI breached its 40 level and entered the bear zone, first time after mid-March. Currently it is trading on 390-400 support area. If Apollotyre breaches 390, next support is around 360-350 level.
No recommendation, only personal observation.
Raju KMS Datla