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Yoganand D
Investors with a short-term horizon can sell the stock of Indraprastha Gas Ltd (IGL) at current levels. The stock has been on an intermediate-term uptrend since it took support at ₹364 in early October 2020. It has conclusively breached a key resistance at around ₹505 in early January this year and registered a new high at ₹581 in mid-January. However, witnessing selling interest and triggered by negative divergence on the daily relative strength index the stock began to decline. Key resistance at ₹560 had limited the recent rally. It has slumped 4.9 per cent with good volume on Thursday and the stock appears to have resumed the down-move. On the weekly chart, the stock has formed a bearish engulfing candlestick pattern which is a short-term bearish reversal pattern, backing the down-move. The daily RSI has slipped into the neutral region from the bullish zone. Taking a contrarian view, the short-term outlook is bearish for the stock. It has potential to extend the down-move and reach the price targets of ₹512 and ₹500 in the forthcoming trading sessions. Traders can sell with a fixed stop-loss at ₹545.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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