Among Auto Stocks, Eicher Motors (NS:EICH) is one stock that has multiplied investors' wealth at an amazing rate over the months and years! It has witnessed an unbelievable journey from 3,000 to 32,000 in the period of 2013-2018 and has garnered a return of 900% in just 5 years time period.
Not only Investors' favourite it has also been in traders kitty for a long time. However, in the last few trading sessions, the stock has taken a hit and has been tumbling to lower levels.
In the following post, I will be throwing light on Present Chart scenario of the stock and how traders shall be positioned now in this stock.
If we take a zoom out look at Monthly Charts of Eicher Motors, there is a break from the up trendline indicating a change in underlying sentiment. Along with the trendline break, the charts also display a Double Top Pattern
Double Top is a Bearish Reversal pattern which indicates the reluctance of the market participants to pay higher prices for the stock. The peak/resistance for this pattern stands at 31,900 and the base is at 26,800. The stock has already authenticated this pattern as it has given a confirmed break down from the base.
As we take a closer look on Daily charts, there is again a Bearish setup. The stock has witnessed a sharp sell-off accompanied with high volumes at 27,000 levels and there is a Descending Triangle in the said time frame.
The base of the pattern rests at 21,000 levels and the stock already breached this mark on 3rd January. It is also trading well below the support of 150, 50, 20 and 10 DEMA indicating a strong selling pressure in the stock.
What Indicators say?
Trend following Indicator, MACD is displaying a Sell crossover suggesting that short and medium term trend may remain subdued. The strong bearish trend is also supported by a rise in ADX, which indicate that the fall is a bearish trend with a strong force.
My outlook for the stock for Short /medium term is 'Negative' and the stock may witness lower levels in coming days. Traders, if positioned, may initiate fresh shorts below the immediate support of 19,750/-
Disclaimer: All views expressed in this site are for reference only. Readers must consult their own investment adviser before taking any investment/trading decision. We hold no financial liability to any user on account of use of information provided on this website.
Add a Comment
Are you sure you want to block %USER_NAME%?
By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.
%USER_NAME% was successfully added to your Block List
Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.