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The short-term outlook for Gujarat State Fertilizers & Chemicals (GSFC) stock is bearish. The bounce from the June low of ₹114.65 failed to see a decisive break above ₹140. The stock has been falling after making a high of ₹143.6 at the beginning of this week. The sharp 4.66 per cent fall on Thursday has dragged the stock well below the 200-Day Moving Average (DMA), which is currently at ₹137. It also signals the beginning of a fresh leg of fall. The stock can now fall to ₹110 and even ₹100 in the next two-three weeks.
The 21-DMA at ₹143 will be a strong resistance that can cap the upside in case of any bounce.
Traders can go short at current levels. Accumulate shorts at ₹136. Keep the stop-loss at ₹145. Trail the stop-loss down to ₹128 as soon as the stock falls to ₹122. Move the stop-loss further down to ₹118 as soon the stock touches ₹114. Book profits at ₹112.
A strong break and a decisive close above ₹143 will be needed to negate the bearish view. Such a break, though less likely can take the stock up to ₹160-₹170.
(Note: The recommendations are based on technical analysis. There is risk of loss in trading.)
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