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Investors with a short-term perspective can consider selling the stock of Reliance Power at current levels. The stock had encountered a significant long-term resistance twice at ₹110 in early June and again in July. Since then, the stock has been on a medium-term downtrend. It breached its 21- and 50-day moving averages in early July and is trading well below them. On Monday, the stock tumbled 4 per cent conclusively breaching the key support at ₹85. The relative strength index on the daily chart is featuring in the bearish zone implying downward momentum. Further, the daily moving average convergence divergence indicator is hovering in the negative terrain. These indicators on the weekly chart are trending downwards backing the downtrend. Our short-term outlook on the stock is bearish. It can extend its current fall and reach our price targets of ₹79 and ₹77.5 in the upcoming sessions. Sell the stock while maintaining a stop-loss at ₹84.2 levels.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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