The stock of SREI Infrastructure Finance fell 3.8 per cent with an above average volume breaching an immediate support at ₹122.5 level on Monday. Since recording a 52-week high of ₹137 in late July, the stock changed direction and has been in a short-term downtrend. This downward reversal was triggered by negative divergence in the daily moving average convergence divergence and weekly price rate of change indicators.
Moreover, after a corrective rally, the stock encountered resistance at ₹130 last week and appears to have resumed its downtrend. The stock has formed a dark cloud cover candlestick pattern, a bearish reversal pattern at this resistance level. Subsequently, the stock fell 3.8 per cent on Monday. The daily price rate of change indicator is on the brink of entering the negative territory from positive, which implies selling interest.
The daily relative strength index beginning to to decline in the neutral region shows lack of strength. The short-term outlook is bearish of the stock. It can extend the down move and test the support at ₹115 and ₹112.5 in the short term. Traders can sell the stock with a stop-loss at ₹123.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.