After testing the 200-day moving average, the stock fell sharply inline with expectations and achieved the price target of Rs.255 last week. Subsequently, the stock bounced back, recovering some losses and ended the week with a 4.6 per cent fall.
The medium-term downtrend will remain in place as long as the stock trades below the key resistance level of Rs.291. The short-term trend has been sideways in the broad range between Rs.250 and Rs.291 since late March.
This sideways movement can continue for a while. Only a decisive breakthrough on either side of this range will give a clear medium-term direction for the stock.
Therefore, traders with a short-term view should tread with caution as long as the stock moves between Rs.250 and Rs.291. Key immediate resistances are at Rs.273 and Rs.291.
Decisive breach of Rs.291 can take the stock higher to Rs.305 and Rs.315; a fall below Rs.250 can pull it down to Rs.240 or Rs.234 levels.
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