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The outlook for the stock of Hikal is bearish. The sharp fall of 4.59 per cent on Monday has marked the end of the sideways consolidation that was in place all through the past week. It also keeps intact the downtrend that has been in place since April. Indeed, the broader trend is also down since September last year.
Monday’s fall indicates the beginning of a fresh leg of fall within the overall downtrend. Strong resistance is in the ₹397–402 region. The stock can fall to ₹336 in the next two-three weeks. Intermediate support is at ₹365. A break below it can trigger the above-mentioned fall to ₹336. A corrective bounce from ₹336 towards ₹365 cannot be ruled out. But a decisive break below ₹336 will see the sell-off intensifying. In that case, the stock can tumble towards ₹260–250 over the next two-three months.
Traders can go short at current levels. Accumulate shorts on a rise at ₹393. Keep the stop-loss at ₹406. Trail the stop-loss down to ₹373 as soon as the stock falls to ₹367. Move the stop-loss further down to ₹361 as soon as the stock touches ₹353. Book profits at ₹346.
(Note: The recommendations are based on technical analysis. There is risk of loss in trading.)
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