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The outlook for the stock of Gujarat Narmada Valley Fertilizers & Chemicals (GNFC) is bearish. The stock has been falling since the beginning of this week. It declined 3.27 per cent on Wednesday and is down 8.8 per cent for the week. The fall on Wednesday has just broken the key support level of ₹433. This gives an initial confirmation of a double-top pattern on the chart.
The stock now has potential to fall further to ₹395 initially and then even to ₹350-₹340 eventually. Traders can go short at current levels. Accumulate shorts on a rise at ₹432. Keep the stop-loss at ₹443. Trail the stop-loss down to ₹420 as soon as the stock moves down to ₹412. Move the stop-loss further down to ₹406 as soon as the stock falls to ₹401. Book profits at ₹395. The bearish outlook will get negated if the stock breaks above ₹437 decisively. Such a break can then take the stock up again to ₹450 and ₹480. It will also mean that the stock can remain in a broad sideways range of ₹420-₹500.
(Note: The recommendations are based on technical analysis. There is risk of loss in trading.)
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