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Investors with a medium-term perspective can sell the stock of Ambuja Cements at current levels. The stock plunged 8.7 per cent last week with good volumes. It decisively breached a key base in the band between ₹200 and ₹205.
The sharp drop below the key support signals a sell on the stock. Since encountering a key resistance in the ₹280-290 band in October 2016, the stock has been on an intermediate-term downtrend. In August this year, the stock met with a key resistance at ₹240; this 200-day moving average capped the upside and it continued to decline. The stock has been in a medium-term downtrend since then.
It now trades well below the 50- and 200-day moving averages. The daily relative strength index continues to feature in the bearish zone and the weekly RSI has entered the bearish zone from the neutral region. Both the daily and weekly price rate of change indicators feature in the negative terrain, implying selling interest. The daily moving average convergence-divergence indicator also features in the negative territory, backing the stock’s downmove.
Overall, the short as well as medium-term trends are down and outlook is bearish. The stock can extend the downtrend and reach the downward price targets of ₹182 and ₹177 in the upcoming trading sessions. Investors/traders with a medium-term perspective can sell the stock with a stop-loss at ₹197.
( This recommendation is based on technical analysis. There is a risk of loss in trading )
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