Motherson Sumi Systems has started to lose its momentum in recent trading sessions after a bullish run. The stock shot up quickly after making a low of Rs 185 in late October. Investors with a short-term perspective can sell the stock. From the October trough, the stock has been on a medium-term uptrend until it registered a new high at Rs 289 on November 6.
However, the stock has changed its trend thereafter, witnessing selling pressure, triggered by negative divergence in daily indicators. On Tuesday, the stock tumbled 3.7 per cent, decisively breaching its medium-term uptrend line. The daily moving average convergence divergence indicator has signalled a sell supporting the stock’s reversal.
Further, the stock has formed a bearish engulfing candlestick pattern on the weekly chart signalling a short-term trend reversal. Indicators on the weekly chart are hovering at overbought levels suggesting that a correction is likely in the stock price.
The stock can continue tumbling further in the coming sessions. Short-term targets are Rs 254.5 or Rs 249 levels. Sell the stock with a stop-loss placed at Rs 271.
( Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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