Technical Analysis

Cummins India (₹316.8): Sell

Yoganand D BL Research Bureau | Updated on May 18, 2020

Investors with a short-term perspective can sell the stock of Cummins India at current levels. The stock had encountered a key resistance at ₹425 in late April this year and began to decline, resuming the medium-term downtrend. Since recording a high of ₹652 in late January this year, the stock has been in a medium-term downtrend. But it registered a 52-week low at ₹281 in early April and was on a corrective rally until late April high. For the past one month, the stock has been in a short-term downtrend.

While trending down, the stock had breached its 21-day moving average last week and currently trades well below it. On Monday, the stock plunged 6.3 per cent accompanied by above average volume. This has strengthened the downtrend.

There has been an increase in daily volume over the past six trading sessions. The daily relative strength index has entered the bearish zone from the neutral region and the weekly RSI continues to feature in the bearish zone.

Both the daily and the weekly price rate of change indicators are hovering in the negative territory indicating selling interest.

The short-term outlook is bearish for the stock. It can continue to trend downwards and reach the price targets of ₹304 and ₹297 in the upcoming trading sessions. Traders can sell the stock with a stop-loss at ₹324 levels.

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

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Published on May 18, 2020
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