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The stock of PI Industries was on a strong long-term uptrend since last March. But this trend is under threat as there is a strong sign of reversal. Bears are having an upper hand since September. This leaves the near-term outlook bearish. A confirmed head and shoulder pattern can also be spotted on the daily chart, indicating a bearish reversal.
The 21-day moving average (DMA) has slipped below the 50-DMA and the stock has broken below a rising trendline. In addition to these, the RSI and the MACD have entered bearish territory. So, the scrip can witness a fall in the coming days. A test of the supports at ₹2,430 and ₹2,200 looks likely in the coming weeks. However, an intermediate corrective rally to ₹2,930 is a possibility that will be short-lived as fresh selling interest can emerge at higher levels. Hence, traders can short now and also at ₹2,930. Keep an initial stop-loss at ₹3,070. When stock depreciates to ₹2,430, exit 50 per cent shorts. For the remaining, revise the stop-loss down to ₹2,650 and look for the next target at ₹2,200
(Note: The recommendations are based on technical analysis. There is risk of loss in trading.)
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