The stock of Indiabulls Real Estate tumbled more than 8 per cent accompanied by above average volumes breaching its immediate support at ₹92 on Tuesday. This plunge gives traders with a short-term perspective an opportunity to sell the stock at current levels. Following a sharp rally in May and early June, the stock encountered long-term resistance at ₹109. Triggered by negative divergence in the daily as well as weekly relative strength index, the stock changed direction. Since then, it has been on a short-term downtrend.

The recent fall has breached a key support and also the stock’s 50-day moving average. The daily RSI has entered the bearish zone from the neutral region indicating bearishness. Also, the daily price rate of change indicator has entered the negative terrain from the positive, implying selling interest. Our short term outlook is bearish. The stock can extend its slide and reach the price target of ₹81.5 and ₹80 in the forthcoming trading sessions. Sell the stock with a stop-loss at ₹87.

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

(This article was published on July 8, 2014)
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