ITC witnessed a turbulent beginning last week as the stock plummeted 7 per cent on Monday. The GST panel suggesting levying 40 per cent tax on products such as tobacco and pan masala, triggered the fall. Though the stock managed to reverse higher from Monday’s low of Rs.310.7, the bounce back lacks strength.
The stock is more likely to reverse lower again. However, the next key resistance is only in the Rs.328-Rs.330 zone. The stock is likely to test this resistance zone before heading south.
Only a strong break above Rs.330 will ease the downside pressure. But such a break looks less probable. Key supports for the stock are at Rs.316 — the 200-week moving average — and at Rs.310. A strong break below Rs.310 will increase the downside pressure and drag ITC lower to Rs.300 and Rs.295 thereafter.
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