Following a steep plunge in early December, the stock of ITC found support at around Rs.311. But the subsequent rally appears to have fizzled out, encountering resistance at Rs.324. It has fallen over one per cent.
The stock trades well below its 50 and 200-day moving averages. The daily relative strength index in the chart has entered the bearish zone and the weekly RSI is on the brink of entering this zone.
Traders with a short-term horizon can consider initiating fresh short positions, with a stop-loss at Rs.324. Continuation of the decline can test support at Rs.311. A strong break below this support can accelerate the stock's short-term down-move and drag it down to the base zone between Rs.295 and Rs.300.
The short-term downtrend will remain in place as long as the stock trades below Rs.335 levels. Immediate resistances are at Rs.324 and Rs.330.