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The outlook for the stock of Lupin is bearish. The stock had tumbled 7.66 per cent on Monday breaking below the key support level of ₹860. The region between ₹850 and ₹860 will be a strong resistance for the stock now. Intermediate bounce to this resistance zone is likely to get fresh sellers in the market.
As such the upside could be capped at ₹860 in the coming days. Traders can go short at current levels. Make use of rallies to accumulate shorts at ₹845. Stop-loss can be placed at ₹895 initially. Trail the stop-loss down to ₹790 as soon as the stock moves down to ₹755. Move the stop-loss further lower to ₹760 as soon as the stock falls to ₹725.
Book profits at ₹705. The bullish outlook will get negated if the stock breaks above ₹860 decisively from here. In that case the stock can rally back to ₹930 and ₹960 levels. But such a strong break and a rise above ₹860 is unlikely because the break below the support level of ₹860 has happened with significant volume. As such the stock will need some strong trigger to rise back above ₹860 which seems less probable.
(Note: The recommendations are based on technical analysis. There is risk of loss in trading.)
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