Technical Analysis

JK Tyre & Industries (₹157.9)

Yoganand D BL Research Bureau | Updated on February 20, 2018 Published on February 20, 2018

Investors with a short-term perspective can sell the stock of JK Tyre & Industries at current levels. Following a medium-term uptrend from the December 2017 low of ₹128, the stock encountered a key long-term resistance at ₹186 in early February this year. The stock tested this resistance and failed to move beyond this hurdle in mid-February. Subsequently, the stock changed direction and started to decline.

Last week, the stock tumbled almost 7 per cent with good volume breaching a key support at ₹170. Over the last two trading sessions, the stock has declined 4 per cent witnessing selling pressure. Further, the stock has closed below the 50 per cent fibonacci retracement level of the prior uptrend implying that the medium-term uptrend is under threat.

The stock hovers well below its 21- and 50-day moving averages. The daily relative strength index is on the brink of entering the bearish zone from the neutral region. Moreover, the daily price rate of change indicator is featuring in the negative territory indicating selling interest. Short-term outlook is bearish for the stock. It can extend the downtrend and reach the targets of ₹151.5 and ₹148 in the upcoming sessions. Traders can sell the stock with a stop-loss at ₹162.

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

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