Birla Corporation (₹724.4): SELL

Gurumurthy K Updated on September 11, 2018
According to data provided by Prime Database, 45 mainboard IPOs came to the market collectively raising Rs.82,109 crore

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.)

Published on September 10, 2018