The long-term uptrend for the stock of Indo Count Industries came to a halt last Monday, after registering an all-time high at Rs.1,248.
Triggered by negative divergence in the indicators in the weekly and monthly charts, the stock changed direction. Encountering resistance at Rs.1,225, the stock nosedived 20 per cent last week. It has formed a bearish engulfing candlestick pattern which signals downward reversal. Further, the stock conclusively breached its immediate support at Rs.1,000 on Friday. The indicators and oscillators in the daily chart have started to enter the bearish zone.
The weekly indicators have turned downwards, which signify downward pressure. Therefore, consider taking profit at this juncture and exiting the stock. A strong fall below the next support level of Rs.820 will strengthen the downtrend and drag the stock down to Rs.700 or even Rs.600 in the long run. Resistances above Rs.1,000 are at Rs.1,100 and Rs.1,200.
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