Technical Analysis

Multi Commodity Exchange of India (₹856.7)

Gurumurthy K BL Research Bureau | Updated on May 31, 2018 Published on May 31, 2018

The outlook for the stock of Multi Commodity Exchange of India (MCX) is bullish. The stock is showing signs of a trend reversal. The stock has been on a strong downtrend since October last year. The price action within this downtrend since January indicates the formation of an inverted head and shoulder reversal pattern. This is a bullish pattern indicating the end of a downtrend.

The stock has broken the neckline resistance of this pattern poised around ₹815 earlier this week. While above this support, a rally to test the 200-day moving average resistance at ₹901 is possible in the coming days.

Though a pull-back move to ₹870 or ₹860 cannot be ruled out from around ₹900, the downside is expected to be limited. As such, an eventual break above ₹901 will pave way for the next targets of ₹940 and ₹950.

Traders with a short-term perspective can go long at current levels and also accumulate on dips at ₹840 and ₹820. Stop-loss can be placed at ₹805 for the target of ₹940. Revise the stop-loss higher to ₹885 as soon as the stock moves up to ₹895.

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

Read the rest of this article by Signing up for Portfolio.It's completely free!

What You'll Get

This article is closed for comments.
Please Email the Editor