The stock of Allahabad Bank fell almost 3 per cent with an above average volume on Wednesday, breaching a key support at around ₹73. This decline has strengthened the stock’s medium-term downtrend that has been in place from the late October peak of ₹89.

Traders with a short-term perspective can sell the stock at current levels. Significant medium-term support at ₹65 cushioned the stock in August and again in October. The stock skyrocketed in late October and encountered a resistance in the band between ₹89 and ₹90 and changed direction. Since then, the stock has been trending down.

Last session, the stock breached its 200-day moving average and it hovers well below the 21- and 50-day moving averages. The daily relative strength index has entered the bearish zone from the neutral region and the weekly RSI is charting downwards in the neutral region. The daily price rate of change indicator feature in the negative territory indicating selling interest.

The short-term forecast for the stock is bearish. It can extend the downtrend and reach the price targets of ₹69 and ₹67.5 in the ensuing trading sessions. Sell the stock with a stop-loss at ₹73.5.

(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)

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