HCL Technologies Limited
HCL Tech doubled in last 15 months from 400 levels in January 2012 to 807 on April 03, 2013. Yesterday, after touching lifetime high of 807, we saw sharp fall in the stock price. We saw Bearish Engulfing at the top of the rally.
Today It has breached the neckline of Double Top Pattern formed in daily chart.
On the oscillator front, we saw negative divergence of RSI in daily as well as weekly chart. We also witnessed negative crossover of RSI with its average in daily and weekly chart, which indicates price reversal on cards.
MACD also sustained gave negative divergence with price and moving below its average, which is negative signal for the stock.
Looking at all these indicators and patterns, I expect the bull run to discontinue for short term. Thus, I advice all our institution and retails clients to exit or reduce their holding in the stock between 758-778 level as it may come down to Rs.710/680 level in next 2-3 months.
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