Friday, January 29, 2016

Granules India

Investors with a short-term perspective can consider selling the stock of Granules India at current levels. The stock fell 6 per cent and has closed decisively below the 200-day moving average at Rs.118. 

It has been in a strong downtrend ever since it recorded a high of Rs.161.3 in late December. This down-move halted at a low of Rs.102.3 last week.

The corrective rally had began from this resistance near Rs.125 — the 38.2 per cent Fibonacci retracement level. After consolidating near this hurdle earlier this week, the stock has resumed its overall downtrend. 

The 7 per cent fall in the last two trading days signals that a new leg of down-move is in place. Immediate resistance is in the Rs.117-119 band, which is likely to cap the upside. An immediate fall to Rs.110 and Rs.107 looks likely. 

Further break below Rs.107 can drag the stock lower to Rs.103 and Rs.102. Traders with a short-term perspective can go short. Stop-loss can be kept at Rs.118 for a target of Rs.107.

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