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The outlook for the stock of KPIT Technologies is bearish. It fell over 4 per cent on Monday breaking below a key support level of ₹565. Prior to this fall, the stock had struggled to breach the ₹600 mark in its several attempts since mid-February. On the daily chart, a complex head and shoulder bearish reversal pattern formation is visible. The fall on Monday has taken the stock below the neckline level of ₹563. This strengthens the bearish case. The level of ₹563-₹565 is an immediate resistance and then ₹600 will be the next higher important resistance. The chances are high for the stock to remain below ₹565 itself. A fall to ₹470-₹450 is on the cards now over the next few weeks.
Traders with a short-term perspective can go short at current levels. Accumulate shorts at ₹555. Keep the stop-loss at ₹588. Trail the stop-loss down to ₹535 as soon as the stock falls to ₹520. Move the stop-loss further down to ₹505 as soon as the stock touches ₹495 on the downside. Book profits at ₹480. To negate the fall to ₹470-₹450, the stock will have to rise past ₹600 decisively. But that looks unlikely.
(Note: The recommendations are based on technical analysis. There is risk of loss in trading.)
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