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Last week, the stock of ITC extended its downtrend from the key resistance level at ₹331 levels by declining almost 2 per cent. However, the stock found brief support at around ₹316 and now trades closer to that level.
The price rate of change indicator in the daily chart has entered the negative territory, implying selling interest and the moving average convergence divergence indicator is signalling a sell. An emphatic breakthrough of the current support can strengthen the bearish momentum and pull the stock down to ₹308 and ₹300 in the short term.
In that scenario, traders with a short-term view can go short with a stop-loss placed at ₹322 levels. To extend the downtrend further, the stock needs to decisively break the significant support band between ₹295 and ₹300. The next support is at ₹285.
However, to alter the downtrend, the stock needs to definitely break the resistance at ₹331 for a rally to ₹345 levels.
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