The stock of Central Bank of India on Thursday tumbled almost 5 per cent and conclusively broke below a key support at ₹87, accompanied by above average volume. This fall has also breached the 38.2 per cent Fibonacci retracement support of the stock’s prior uptrend that commenced from the February low of ₹48. Moreover, it has also closed well below its 200-day moving average. The stock failed to move past a key resistance at around ₹110 this June and again in late August. Subsequently, the stock started to decline, triggered by negative divergence in the weekly relative strength index. Since then, the stock has been on a medium-term downtrend. The recent fall has reinforced the bearish momentum. Both the daily and weekly relative strength indices have entered the bearish zone from the neutral region. The daily as well as weekly price rate of change indicators are featuring in the negative territory implying selling interest. Overall, the short-term outlook is bearish for the stock. It can continue its downtrend and reach the price targets of ₹78 and ₹75.5 levels in the coming trading sessions. Traders with a short-term view can sell the stock with a stop-loss at ₹85.5.

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

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