Chambal Fertilizers - SELL

We recommend a sell in Chambal Fertilisers and Chemicals from a short-term perspective. It is evident from the charts that this stock has been trending downwards since June high of Rs 96 (52-week high), forming lower peaks and lower bottoms. However, in early October, the stock found support at around Rs 32, which is a key long-term support level and began to trend up. This uptrend of the stock was a corrective up move and it encountered resistance at Rs 54. Subsequently, shaping a bearish engulfing candlestick pattern, the stock resumed its downtrend. On November 6, the stock tumbled over 8 per cent penetrating the corrective up trendline, reinforcing the bearishness. The daily relative strength index (RSI) is declining in the neutral region towards the bearish zone and the weekly RSI is featuring in the bearish zone. We are bearish on the counter from a short-term horizon. We anticipate the stock’s decline to continue until it hits our price target of Rs 38.5 in the forthcoming trading sessions. Traders with short-term perspective can sell the stock while maintaining a stop-loss at Rs 46.

via BL