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The stock of Century Plyboards (India) plummeted 8 per cent with an above average volume on Wednesday, breaking below a key support level of ₹300. This decline provides an opportunity for short-term traders to sell the stock at current levels. After a medium-term uptrend, the stock encountered a key resistance at around ₹360 in January this year. This resistance level capped the stock’s rally in April. The stock reversed direction and has been in a short-term downtrend since then.
While trending down, the stock conclusively breached its key supports at ₹330 and the 50-day moving average. On Wednesday, the stock tumbled breaking below a key medium-term support as well as its 200-DMA.
The short-term downtrend has strengthened. The daily relative strength index features in the bearish zone and the weekly RSI has entered this zone from the neutral region. Both the daily as well as weekly price rate of change indicators feature in the negative territory implying selling interest.
Overall, the short-term outlook is bearish for the stock. It can continue to decline and reach the price targets of ₹270 and ₹264 in the coming trading session. Traders with a short-term view can sell the stock with a stop-loss at ₹287.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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