Monday, January 11, 2016


Last week, the stock of ITC failed to move above its key resistance level of Rs.330 and plunged 4.3 per cent. While declining, the stock decisively breached its key support at Rs.320. Now, it tests the next key base at Rs.311. 

Further fall can pull the stock down to Rs.300 in the coming week. The stock trades well below its 50 and 200-day moving averages. Moreover, the relative strength index in the daily chart feature in the bearish zone indicates downward momentum. Indicators in the weekly chart are on the brink of entering the bearish zone from the neutral region. 

After moving sideways, the stock may resume its short-term downtrend. Therefore, traders with a short-term perspective can make use of the rallies to sell the stock while maintaining a stop-loss at Rs.320 levels. Key resistance above Rs.320 is at Rs.335. Only a strong rally above the level of Rs.335 will alter the downtrend. Significant support below Rs.300 is at Rs.290 or Rs.285.

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