This chart shows the price movement of Polycab India Ltd. on a weekly timeframe, with a focus on the price and Relative Strength Index (RSI) to identify momentum shifts.
Price Action :
The stock made a recent high around the ₹7,400 level (indicated by the green arrow). It has been in an uptrend with a series of higher lows and higher highs.
The current price of ₹7,184.95 shows a slight pullback from the recent high but still reflects an upward trend.
RSI Divergence :
RSI (Relative Strength Index): A commonly used momentum indicator. The RSI is currently at 67.26, which is below the overbought zone (above 70), but still relatively high, indicating strong momentum.
Divergence: The price has made a higher high (green arrow), while the RSI is showing a lower high (red arrow), indicating bearish divergence.
Implication: A bearish divergence between price and RSI suggests that despite the price rising, the momentum is weakening, signaling a potential correction or pullback in the near term.
The price action shows strength with a bullish trend continuing in Polycab. However, the bearish divergence in RSI could indicate a slowing momentum, potentially leading to a short-term pullback. It would be prudent to watch for confirmation of the divergence, such as a break below recent support levels or a further drop in RSI, before making any trading decisions.
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