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The fall in the stock of Thermax is gaining momentum. The stock fell 1.6 per cent on Thursday. It has been falling consistently over the last four trading days and is down about 6 per cent over this period. The sharp fall this week has led to the stock decisively breaking below its key 200-DMA support at ₹820. It has also breached a trend-line support at ₹799. Additionally, Thursday’s fall has taken the stock well below the 61.8 per cent Fibonacci retracement support level.
The 21-DMA is on the verge of crossing and falling below the 200-DMA. This suggests that the outlook may continue to remain bearish, with the upside remaining capped. A fall to ₹750 looks likely in the coming days. Further break below ₹750 can take it lower to ₹740 and ₹730 thereafter.
Traders with a short-term perspective can go short. Stop-loss can be placed at ₹790 for a target of ₹750. Revise the stop-loss lower to ₹770 if the stock moves down to ₹760.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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