The stock of Reliance Communications tumbled 5.6 per cent accompanied by strong volume breaking through a key base at ₹116 on Thursday. Its key long-term resistance band between ₹155 and ₹160 is arresting the stock from a further upmove. This resistance zone restricted the rally in the stock during September 2013 and in June 2014. Since then the stock has been on a medium-term downtrend. The stock is trading well below its 50- and 200-day moving averages. The relative strength index on the daily chart is featuring in the bearish zone and weekly RSI has just entered this zone from the neutral region implying bearish momentum. The moving average convergence divergence indicator on the weekly chart has signalled a sell and is on the brink of entering the negative territory. The short-term outlook is bearish. Targets are ₹107.5 and then ₹105. Sell the stock while maintaining a stop-loss at ₹114.5.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)