The stock of Apollo Tyres plunged 5.6 per cent breaching a key support level at ₹180 on Tuesday.
This gives short-term traders an opportunity to sell the stock at current levels. Since marking a new high at ₹249 in early February this year, the stock has been on a medium-term downtrend. Following a corrective rally which had retraced 38.2 per cent fibonacci retracement level of the downtrend, the stock met with a resistance around ₹190 and resumed its medium-term downtrend. Moreover, with the recent fall, the stock has breached its 50-day moving average decisively and now hovers way below its 200 DMA.
The indicators on the daily chart are trending down and on the verge of entering the bearish zone. As the stock has resumed its downtrend, it can extend its fall to ₹166 and ₹162.5 in the forthcoming trading sessions. Sell the stock with a stop-loss at ₹176.5.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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