The stock achieved its peak of Rs627 in second week of January 2008 and corrected to a low of Rs57 in October 2008.
Since then, it saw a smart pullback rally to Rs160 levels till Monday this week. However, on Tuesday, selling pressure intensified in the counter as the stock price moved below its previous open, resulting into Bearish Engulfing pattern.
The above candlestick pattern creates a potential short-term reversal. The daily RSI is exhibiting negative divergences.
This suggests that the trend is weakening. A break below Rs136 levels will see the stock correcting for potential target of Rs125 and Rs120 levels.
If the market could recover, given one really large session of short covering, traders need to maintain a strict stop loss of Rs146 on all short positions.