The stock of Radico Khaitan has been in a strong downtrend since beginning of this year. The stock made a high of ₹1,303.48 in January and has tumbled over 30 per cent from there. Strong resistance is in the ₹940-₹965 region which can cap the upside. Both the 21- and 200-Day Moving Averages (DMA) are poised in this region. The 21-DMA is on the verge of breaking below the 200-DMA. This strengthens the bearish case. As such the chances are high for the stock to break below the support at ₹857. Such a break will see the current downtrend extending towards ₹750-₹725 in the coming weeks. Traders can go short at current levels.
Accumulate shorts on a rise at ₹930. Keep the stop-loss at ₹975. Trail the stop-loss down to ₹865 as soon as the stock moves down to ₹820. Move the stop-loss further down to ₹810 as soon as the stock touches ₹785. Book profits at ₹765. The stock will have to rise past ₹965 in order to ease the downside pressure and signal a trend reversal. But on the charts, such a strong rise above ₹965 looks less probable.
(Note: The recommendations are based on technical analysis. There is risk of loss in trading.)