The stock of HPCL has been on a strong downtrend since November last year. The 5.75 per cent fall on Tuesday keeps the overall downtrend intact and strengthens the bearish sentiment. The immediate resistance is at ₹227-₹230 region and it can cap the upside. An immediate break and rally above ₹230 looks unlikely. The 21-Day Moving Average (DMA) has crossed below the 55-DMA. It is on the verge of crossing below the 100- and 220-DMA as well.
This is a bearish signal indicating the upside capped and fresh sellers are likely to emerge at higher levels. A fall to ₹195-₹190 can be seen in the next one-two weeks. A break below ₹190 will intensify the sell-off. Such a break will trigger a steeper fall towards ₹165-₹160 over the next one or two months.
Traders can go short at current levels and accumulate shorts at ₹224, if it bounce towards ₹227-₹230. Keep the stop-loss at ₹233 and trail it to ₹210 as soon as the stock falls to ₹206. Move the stop-loss further to ₹205 when the stock touches ₹201 on the downside. Book profits at ₹197.
(Note: The recommendations are based on technical analysis. There is risk of loss in trading.)