We recommend a sell in the stock of Future Retail from a short-term perspective. It is evident from the charts of the stock that it has been on a long-term downtrend since the October 2010 peak of Rs 527. Medium-term trend has been down from its January high of Rs 275. Moreover, short-term trend is also down for the stock. It is trading well below its 50- and 200-day moving averages.
On Wednesday, the stock plunged 4.5 per cent accompanied by above average volume decisively breaching its significant long-term support at Rs 130. Both daily and weekly relative strength indices are featuring in the bearish zone. Further, the daily price rate of change indicator has conclusively entered the negative terrain from the positive terrain implying selling interest.
The daily moving average convergence divergence indicator is featuring in the negative territory and has signalled a sell. Our short-term outlook on the stock is bearish. We expect its downtrend to continue and reach our price target of Rs 120 or Rs 117.5 in the forthcoming trading sessions. Traders with short-term perspective can sell the stock while maintaining stop-loss at Rs 128 level.
( Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)