The outlook for the stock of PNC Infratech is bearish. There is a complex head and shoulder reversal pattern formation the charts. The 6.47 per cent fall on Monday has taken the stock just below ₹250 – the neckline level of the pattern. This level of ₹250 will now act as a good resistance now. Above this ₹259 is the next key hurdle. The upside is likely to be capped at ₹259 incase if a bounce is seen in the coming days.
The 100-Day Moving Average (DMA) is on the verge of crossing the 200-DMA. This strengthens the bearish case and indicates that any bounce could be short-lived and more fall is possible from here. The stock can fall to ₹228 first. A break below ₹228 can then drag the stock further down to ₹210 and ₹200 eventually.
Traders can go short at current levels. Accumulate shorts at ₹249 and ₹256 in case if a bounce is seen. Keep the stop-loss at ₹261. Trail the stop-loss dwon to ₹242 as soon as the stock falls to ₹236. Move the stop-loss to ₹237 as soon as the stock touches ₹232. Book profits at ₹229.
(Note: The recommendations are based on technical analysis. There is risk of loss in trading.)
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