Texmaco

We recommend a sell in Texmaco from a short-term trading horizon. The stock was on an intermediate-term uptrend from its 52-week low of Rs 35 recorded in March till its June high of Rs 125. Subsequently, the stock reversed direction from the resistance level Rs 125 and has been on a medium-term downtrend. This downtrend appears to be pretty strong as we observe a downward breakaway gap formed on July 6, preceded by an exhaustion gap formed on June 5. The volume during the occurrence of gap supports them. Moreover, after testing the twin support (an intermediate-term up-trendline and key support) at Rs 90 for few sessions, the stock conclusively broke through by diving 8 per cent on July 13. The daily relative strength index is featuring in the bearish zone and weekly RSI is falling in the neutral region. The moving average convergence and divergence indicator is on the verge of entering the negative territory. Our short-term outlook is bearish on the stock. We anticipate it to dive until it hits our price target of Rs 75. Traders with a short-term perspective can sell the stock while maintaining a stop-loss at Rs 87.

via BL