Todays Pick

Cadila Healthcare (₹494.6): SELL

Akhil Nallamuthu | | Updated on: Nov 09, 2021

The outlook for the stock of Cadila Healthcare is negative. The strong rally that was in place since March 2020 reversed direction in May this year after marking a high of ₹673.7. The stock has slipped below the 50-day moving average and also broken below a rising trendline. Additionally, a bear flag is also being confirmed as the stock broke below the support at ₹530 last month.

These indicators on the chart confirm the trend reversal. So, the stock is likely to extend the decline towards the next key support at ₹418. Notably, the bear-flag pattern also indicates a fall to ₹418. Nevertheless, there can be a pause at ₹450 and there are chances to either consolidate above it or see a short-lived corrective rally. Given this, traders can sell at current levels and short again on a rise to ₹530. Stop-loss at ₹555. Exit half of the shorts at ₹450 and revise down the stop-loss to ₹470 for the rest. Exit the balance at ₹418.

(Note: The recommendations are based on technical analysis. There is risk of loss in trading.)

Published on November 08, 2021

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