Technical Analysis

Adani Enterprises (₹185.8)

Yoganand D BL Research Bureau | Updated on March 06, 2018 Published on March 06, 2018

The stock of Adani Enterprises tumbled 7.5 per cent breaching a significant medium-term support at ₹195 on Monday. Investors with a short-term horizon can sell the stock at current levels. The stock encountered a key resistance at ₹220 in late January and started to move sideways in the band between ₹195 and ₹220.

After testing the upper boundary in mid-February, the stock recorded an all-time high at ₹223 and reversed direction. This reversal is triggered by a negative divergence in daily moving average convergence divergence. Since then, the stock has been a short-term downtrend. While trending down, the stock breached its 21-day moving average initially and its 50-day moving average on Monday. The stock trades well below these moving averages.

The daily relative strength index has entered the bearish zone from the neutral region and the weekly RSI has slipped into neutral region from the bullish zone. The daily price rate of change indicator feature in the negative territory implying selling interest.

Overall, the short-term outlook is bearish for the stock. It can extend the downtrend and reach the price targets of ₹178.5 and ₹174.5 in the upcoming trading sessions. Traders can sell the stock with a stop-loss at ₹189.5.

(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)

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