The outlook for the stock of Century Plyboards is bearish. The stock fell sharply by 4.52 per cent on Monday breaking below the key support level of ₹580. Resistance will now be in the ₹580-₹590 region. Rallies to this resistance region are likely to get fresh sellers coming into the market and cap the upside. As such a rise beyond ₹590 looks unlikely at the moment. The stock can fall to ₹490-₹480 and even ₹470 in the coming weeks.
Traders can go short at current levels. Accumulate shorts on rallies at ₹575. Stop-loss can be placed at ₹605. Trail the stop-loss down to ₹540 as soon as the stock moves down to ₹525. Move the stop-loss further down to ₹520 as soon as the stock falls to ₹505. Book profits at ₹485. The region between ₹480 and ₹470 is strong long-term trend support.
As such, the current fall is likely to halt in this region. A strong bounce from the ₹480-₹470 region will indicate the beginning of a fresh leg of the rally. As such traders will have to make sure to exit the shorts as the prices fall towards the ₹480-₹470 region.
(Note: The recommendations are based on technical analysis. There is risk of loss in trading.)