The outlook for the stock of Radico Khaitan is bearish. The stock had tumbled over 4 per cent on Monday and has closed on a weak note. The sharp fall on Monday has dragged the stock well below the key ₹400-380 support cluster. There is also a head and shoulder reversal pattern visible on the chart. This is a bearish pattern indicating a reversal in the upmove. The neckline resistance of this pattern poised around ₹390 is likely to cap the upside in the near term. Intermediate bounce to this hurdle is likely to find fresh sellers coming into the market.
A fall to ₹330 and ₹320 is likely in the near term. A break below ₹320 will then increase the likelihood of the fall extending to ₹300 or even lower levels thereafter. Traders can go short at current levels and also on rallies at ₹380. Stop-loss can be placed at ₹405 for a target of ₹300.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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