On the daily chart, the stock has broken down from a three-month resistance line. From January 2009, the stock has struggled to close past the levels of Rs2,169-2,180.
On Friday, it closed above the critical resistance zone but failed to sustain the above levels, resulting into a sharp drop of over 6% in Monday’s trading session.
We expect the weakness to continue and the stock could retrace back to the levels of Rs1,500 from which the stock has seen a rally from the start of March 2009.
Moreover, a bearish candlestick on the daily chart, near the important level of resistance, confirms the sign of reversal. It suggests that current uptrend is at the end and some downtrend move will be in place soon.
We recommend high risk traders to SELL the stock in the range of Rs2,040 - 2,070 with stop loss of Rs2,110 for an initial target of Rs1,920.