The uptrend in Thomas Cook from the February low of ₹72.6 has found strong resistance at ₹107.

The stock has failed to breach this level despite several unsuccessful attempts in the last three weeks. The sharp 3 per cent fall on Tuesday has decisively broken the support at ₹101.7. This suggests that a corrective fall is on the cards.

The short-term outlook has turned bearish and opens an opportunity for traders to take short-positions. Immediate resistances are at ₹100.4 and ₹101.7. Below these resistances, the stock can fall to ₹97 and ₹95 in the coming days.

Traders with a short-term perspective can go short with a stop-loss at ₹101.2 for a target of ₹97.2.

Only a strong break above ₹101.7 will give some relief for the stock.

However, it needs a decisive break and should close above ₹107 to negate the bearish view.

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

Correction

The stock recommendation headline for Thomas Cook incorrectly said Buy. The error is regretted.

(This article was published on April 29, 2014)
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