NBCC (I) (₹86.2): Sell

The outlook for the stock of NBCC (India) is bearish. The stock fell all through last week and was down over 8 per cent. This down move has extended to this week as well as the stock fell 3.8 per cent on Monday.

The stock has been in a strong downtrend since November last year. After a brief sideways consolidation over the last three months, the overall downtrend has resumed. The price action since March this year indicates the formation of a head and shoulder pattern. In this case this pattern will act as a continuation pattern. The target level of this pattern is ₹73. The neckline resistance of this pattern at ₹91 can cap the upside. Intermediate rallies to this hurdle can find fresh sellers coming into the market.

Traders with a short-term perspective can go short at current levels and also accumulate on rallies at ₹89. Stop-loss can be placed at ₹92 for a target of ₹74. Revise the stop-loss lower to ₹84 as soon as the stock moves down to ₹82. The outlook will turn positive only if the stock breaks above ₹91 decisively, which looks unlikely at the moment.

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

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