The stock of Arvind encountered significant long-term resistance in the band between Rs.320 and Rs.330 in early August 2015. It reversed direction after that, triggered by negative divergence in the daily moving average convergence divergence indicator. Since then, the stock has been on a short-term downtrend.
After a corrective rally, the stock failed to surpass the 200-day moving average as well as a key resistance around Rs.270 and continued to decline. The stock hovers well below its 21- and 50-day moving averages.
On Tuesday, the stock tumbled 5 per cent resuming the downtrend. With this fall, the daily relative strength index has re-entered the negative zone from the neutral region. The near-term outlook is bearish for the stock. It can extend its downtrend and reach the price target of Rs.246.5 and Rs.241.5 in the upcoming trading sessions. Investors with a short-term horizon can sell the stock with a stop-loss at Rs.262.5
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