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The outlook for the stock of Wipro is bearish. The stock has found strong resistance in the ₹610-₹620 region and had started moving down. The neckline resistance of the double top pattern, the 21-Week Moving Average are all poised in ₹610-₹620 region. The fall below ₹600 confirms the double top pattern.
The price action since March also indicates a rounding pattern strengthening the bearish case. The stock can fall to ₹530 in the next couple of weeks. A break below ₹530 can drag it further to ₹480-₹475 in the next couple of months. The 100-Week Moving Average and the target of the double-top pattern are poised in the ₹480-₹475 region.
Traders can go short at current levels. Accumulate shorts on the rise at ₹595 with stop-loss at ₹625. Trail the stop-loss down to ₹555 and then at ₹535. Move the stop-loss further down to ₹515 when it touches ₹505 on the downside and book profits at ₹490.
The stock will have to rise past the ₹600-₹620 resistance zone to become bullish. That looks unlikely.
(Note: The recommendations are based on technical analysis. There is risk of loss in trading.)
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