Birla Corporation (₹724.4): SELL
The outlook for the stock of Birla Corporation is bearish. The stock tumbled 4 per cent on Monday breaking below a key support level at ₹733. Prior to this fall, the stock has been stuck in a narrow sideways range between ₹730 and ₹785 for more than a week. All through this sideways move, the 21-day moving average had capped the upside in the stock.
Cluster of resistance are poised in between ₹730 and ₹750 which can restrict the upside in the near term. Intermediate bounce to this resistance region is likely to find fresh sellers coming into the market. A fall to ₹700 is likely in the near term.
If the stock manages to bounce from this psychological support, a relief rally to ₹730 is possible. But such a move is likely to be shortlived. An eventual break below ₹700 will then increase the likelihood of the stock extending its fall to ₹680 or even ₹660 over the short term.
Traders can go short at current levels and also accumulate at ₹735. Stop-loss can be placed at ₹745 for the target of ₹685. Revise the stop-loss lower to ₹715 as soon as the stock moves down to ₹705.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)