Investors with a short-term perspective can sell the stock of Voltas at current levels. It is evident from the charts of the stock that after recording a new high at Rs.360 in late June, the stock changed direction triggered by negative divergence in the moving average convergence divergence indicator. Since then, it has been on a short-term downtrend. After a corrective rally the stock met with a key resistance at Rs.330 in the previous week and continued to decline.
It has formed a bearish engulfing candlestick pattern at this resistance level which indicates bearish reversal. Further, the stock tumbled 3.5 per cent on Monday, decisively breaching its 21- and 50-day moving averages. The short-term downtrend is intact and the outlook is bearish for the stock. It can extend the ongoing downtrend by decisively breaking the current support and reaching the price target of Rs.293.5 and Rs.287 in the approaching trading sessions. Sell the stock with a stop-loss at Rs.312.5.
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