Investors with a short-term perspective can consider selling the stock of Hindalco Industries at current levels. The stock has been on an intermediate-term downtrend from its June 2014 peak of ₹198. Both medium- and short-term trends are also down for the stock. Following a corrective upmove, the stock encountered a key long-term resistance at the ₹124-127 range recently. Testing this resistance band and its 21-day moving average, the stock appears to have resumed its downtrend.
On Wednesday, the stock tumbled 3.7 per cent with heavy volumes. With this fall, the daily relative strength index has entered the bearish zone from the neutral region while the weekly RSI continues to feature in the bearish zone. The stock trades well below its 50- and 200-day moving averages. The overall outlook is bearish. The stock can continue to decline and reach the target of ₹112 and ₹110 in the upcoming sessions. Sell the stock with a stop-loss at ₹119.5.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)