Technical Analysis

Chennai Petroleum Corporation (₹242.2): Sell

Yoganand D BL Research Bureau | Updated on January 28, 2019 Published on January 28, 2019

Investors with a short-term perspective can consider selling the stock of Chennai Petroleum Corporation at current levels. The stock tumbled 5.8 per cent accompanied by an above average volume breaking below a key support level of ₹257 on Monday. Since encountering a key resistance at ₹477 in November 2017, the stock has been in an intermediate-term downtrend. Moreover, medium- as well as the short-term trends are also down for the stock.

In early January, the stock met with a key barrier at ₹300 and resumed its downtrend. While trending down, the stock has decisively breached its 21- and 50-day moving averages and trades well below them.

The daily relative strength index features in the bearish zone and the weekly RSI has entered the bearish zone from the neutral region. Besides, the daily and weekly price rate of change indicators hovers in the negative terrain implying selling interest.

The short-term outlook is bearish for the stock. It can continue to trend downwards and reach the price targets of ₹232.5 and ₹227.5 in the upcoming trading sessions. Traders can sell the stock with a stop-loss at ₹247.5.

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

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