Todays Pick

Chambal Fertilisers & Chemicals (₹216.7): Sell

Yoganand D BL Research Bureau | Updated on March 18, 2021

Investors with a short-term horizon can sell the stock of Chambal Fertilisers & Chemicals at current levels. The stock took support at around ₹135 in early September 2020 and had been in a medium-term uptrend until it encountered a key resistance at ₹260 in early February this year. The vital resistance level of ₹260 limited the rally in early March and the stock started to decline. The negative divergence on the weekly relative strength index had triggered the trend reversal. The stock has been in a short-term downtrend since early February.

Early the week, the stock breached the 21- and 50-day moving averages and continued to trend downwards. It trades well below these moving averages. On Thursday, the stock tumbled 4 per cent with above average volume, decisively breaching a key support at ₹225. The daily RSI has entered the bearish zone from the neutral region and the weekly RSI has slipped into the neutral region from the bullish zone. Further, the daily as well as the weekly price rate of change indicators feature in the negative terrain implying selling interest. The short-term outlook is bearish for the stock. It can extend the downtrend and reach the price targets of ₹208 and ₹203 levels. Traders can sell the stock with a stop-loss at ₹222 levels.

The recommendations are based on technical analysis. There is risk of loss in trading

Published on March 19, 2021

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