Technical Analysis

Voltas (₹574.8): Sell

Yoganand D BL Research Bureau | Updated on May 08, 2019 Published on May 09, 2019

Investors with a short-term view can sell the stock of Voltas at current levels. The stock plummeted 4.3 per cent accompanied by above average volume on Wednesday, decisively breaking below a key support at ₹600. This fall has mitigated the short-term uptrend that was in place from the February low of ₹501.

After encountering a key resistance at ₹635 in late March, the stock changed direction triggered by negative divergence in the daily relative strength index and price rate of change indicator. Since then, the stock has been trending down. Key support at ₹600 was providing base till last session. Moreover, the stock has conclusively breached the 21- and 50-day moving averages and hovers well below them.

The daily RSI has entered the bearish zone from the neutral region and the weekly RSI features in the neutral region. Besides, the daily price rate of change indicator hovers in the negative territory implying selling interest and the weekly indicator is on the brink of entering the negative territory.

The short-term forecast is bearish for the stock. It can continue to trend down and reach the price targets of ₹552 and ₹540. Traders can sell the stock with a stop-loss at ₹587.

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

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