Investors with a short-term perspective can sell the stock of Multi Commodity Exchange of India (MCX) at current levels. The stock has been in a long-term downtrend since encountering a key resistance at around ₹1,400 in December 2016.
Following a corrective uptrend, the stock had met with a crucial resistance at ₹900 in early August this year and had resumed the downmove. Since then, the stock has been in a short-term downtrend.
On Tuesday, the stock plunged almost 6 per cent accompanied with above average volume, decisively breaking below a key support at ₹800 as well as its 200-day moving average. This fall has strengthened the downtrend.
The daily relative strength index has entered the bearish zone from the neutral region. Both the daily and weekly price rate of change indicators feature in the negative territory implying selling interest. Traders can sell with a fixed stop-loss at ₹792. Targets are ₹745 and ₹728.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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