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The downtrend in the stock of Dilip Buildcon that has been in place since mid-October has gained strength. The stock made a high of ₹750 in October has tumbled 30 per cent from there. Immediate resistance is at ₹535 and then a higher one is at ₹558. The upside could be very well capped at ₹535 from here. The stock can fall to ₹505-₹500 in the near-term. A break below ₹500 can drag the stock further lower to ₹445 in the coming weeks. Traders can go short at current levels and also accumulate on rallies at ₹533. Keep the stop-loss at ₹541. Trail the stop-loss down to ₹522 as soon as the stock moves down to ₹515. Move the stop-loss further down to ₹515 as soon as the stock falls to ₹509. Book profits at ₹505.
The downside pressure will ease only if the stock breaks above ₹558 decisively. Such a break, though looking less likely now, can take the stock up to ₹590. But on the charts, chances appear to be high for a steeper fall to ₹445 from here rather than a rise to ₹590-₹600.
(Note: The recommendations are based on technical analysis. There is risk of loss in trading.)
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