Investors with a short-term horizon can sell the stock of Muthoot Finance at current levels. On Wednesday, the stock tumbled 4.3 per cent with above average volume and decisively broke below a key support at ₹325. The stock has plummeted more than 9 per cent so far this week. Since encountering a key resistance at ₹400 in August, the stock was on a sideways consolidation phase in the band between ₹325 and ₹400 until the last trading session. The uptrend that commenced from the key support at ₹172 this March appears to have ended in August.
The ongoing fall has initiated fresh selling pressure and has strengthened the downtrend. The stock trades well below its 21- and 50-DMAs. Both the daily and weekly price rate of change indicators are hovering in the negative territory implying selling interest. A fall to reach the price targets of ₹295 and ₹288 levels is likely in the ensuing days. Sell the stock with a stop-loss at ₹315.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)