IFCI

We recommend a sell in IFCI stock from a short-term trading horizon. It is evident from the charts of IFCI that it bottomed in early March, taking support around Rs 16, which is a key intermediate-term support level. Since March low the stock has been trending up and is on an intermediate-term up-trend. The stock’s up-trend accelerated steeply in mid-May. However, after penetrating a key resistance at Rs 40, the stock encountered another resistance at Rs 60 recently. On June 5, the stock decline 5 per cent forming a dark cloud cover candlestick pattern. This pattern is a short-term bearish reversal pattern. Moreover, we notice that the daily relative strength index is displaying negative divergence, triggering the stock’s reversal. The weekly indicators are in overbought territory signalling near-term correction. The volumes are gradually reducing over the past three trading sessions. We take a contrarian view on the stock from a short-term perspective and anticipate it to tumble further until it hits our price target of Rs 48 in the approaching trading sessions. Traders with short-term perspective can sell the stock while maintaining a stop-loss at Rs 56.5.

via BL