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Investors with a short-term perspective can sell the stock of Praj Industries at current levels. The stock has been in a medium-term uptrend since it took support at around ₹74 in November 2020.
In mid-March this year, the stock found support at ₹152 and continued to trend upwards. It has been in a short-term uptrend since then. But, the stock registered a 52-week high at ₹241.8 this Monday and started to decline. Key resistance at ₹240 is limiting the upside. Witnessing selling interest at higher levels, the stock fell 4.9 per cent with good volumes on Tuesday.
Last week, the stock had touched the upper boundary of the Bollinger Bands indicating reaching the overbought territory and started to decline. Moreover, the weekly relative strength index is displaying negative divergence backing the trend reversal.
Taking a contrarian view, the short-term outlook is bearish for the stock. It has potential to extend the on-going down-move and reach the price targets of ₹205 and ₹201 in the forthcoming trading sessions. Traders can sell the stock with a stop-loss at ₹219 levels.
(Note: The recommendations are based on technical analysis. There is risk of loss in trading.)
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