The uptrend in the stock of J.K.Cement (₹2,976.70) that was in place since April 2020, has ended and the stock is showing a sign of reversal. Investors holding this stock can exit at current levels as the stock is set to see a steep fall in the coming months. The stock has formed a top above ₹3,600. Since August last year, the stock has failed in its several attempts to breach ₹3,600 decisively and manage a monthly close above it. This indicates the presence of strong sellers above ₹3,600. The sharp 11 per cent fall in the last two weeks confirms the trend reversal and the outlook is now bearish.
The decisive fall below ₹3,200 has dragged the stock well below the 200-Day Moving Average (DMA), which is currently at ₹3,216. This strengthens the bearish case and opens the door for a further fall. The region between ₹3,200 and ₹3,250 will act as a strong resistance and cap the upside. Intermediate bounce above ₹3,000 if seen is likely to see fresh sellers coming into the market. The stock can fall to ₹2,650 and ₹2,550 initially. Thereafter a corrective bounce to ₹2,800-₹2,850 is a possibility. An eventual break below ₹2,550 will intensify the sell-off and drag the stock to ₹2,400 and even ₹2,200 over the medium-term.
A further fall below ₹2,200 is less likely. From a long-term perspective, the fall to ₹2,400-2,200 will be a good opportunity to buy this stock again.
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