The stock of Berger Paints slumped 4.6 per cent with good volume, breaking below a significant support at ₹525on Wednesday. Investors with a short-term horizon can sell the stock at current levels.
After registering an all-time high at ₹597 in early February this year, the stock reversed direction triggered by negative divergence in the weekly RSI as well as the weekly price rate of change indicator. Since then, the stock has been in a short-term downtrend.
Last week, the stock had conclusively breached its 21- and 50-day moving averages and trades well below these moving averages. The recent break below a key support level of ₹525 has strengthened the downtrend.
The daily relative strength index features in the bearish zone and the weekly RSI has entered the neutral region from the bullish zone. Besides, the daily price rate of change indicator hovers in the negative terrain and the weekly counterpart has just entered the negative terrain implying selling interest.
The short-term outlook for the stock is bearish. It can continue to trend downwards and reach the price targets of ₹482 and ₹472 in the upcoming trading session. Traders with a short-term perspective can sell the stock with a stop-loss at ₹514 levels.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)