F&O: Stock Continues Downtrend with ‘Triangle Breakdown’!

  • Stock Market Analysis
  • Editors Pick

Tuesday’s session has turned out to be a gloomy one as investors’ portfolios are resuming their fall, opposite to what the Nifty 50’s stability is representing. As of 3:19 PM IST, almost all of the sectoral indices are trading in the red zone with three of them cracking over 1% each. With many breakdowns being clearly visible in today’s session, one such counter that should be on the radar of traders is Granules India Limited (NS: GRAN ).

It is a small-cap pharmaceutical company with a market capitalization of INR 6,834 crores and currently trades at a P/E ratio of 13.45 and a dividend yield of 0.54%. Although the pharma space had been holding its ground for the last few sessions, many stocks gave up today.

Image Description: Daily chart of Granules India with volume bars at the bottom

Image Source: Investing.com

The share price of Granules India witnessed a sharp cut of 4.48% to INR 270.95 (as of writing) and broke below an important support level of INR 280. The stock had been taking support from this level numerous times in the recent past and was never able to break below it. On the upside, it was gradually making lower highs and this combined price action turned into the formation of a descending triangle chart pattern on the daily chart.

This pattern breakdown is painting a bearish picture for the stock and long holders might get in trouble from here. The long-term analysis is projecting to a steep downside as the stock has essentially no demand zones till the level of around INR 230. This means the stock could plunge by INR 50 from the CMP in the future, which obviously is not a one-week target. It might be a good idea to exit on a bounce and either wait for lower levels to get in or switch to another pharmaceutical company. As long as the previous swing high of INR 290.8 is not breached, which was marked on 21 March 2023, the trend clearly remains bearish.

On the volume front, a total of 1.63 million shares have exchanged hands on the NSE which is roughly 160% higher than the 10-day average volume of 628K shares. This is not a very high volume but still better than a subdued figure and it is increasing the reliability of the impending fall.

Read More: Weekend Read: A Book Meant for ‘Serious Traders’!

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  • Anshul Malpani @Anshul Malpani
    pls update on Granules
    Like 0
  • Kothamachu Sivaiah @Kothamachu Sivaiah
    Dear ayush, Good technical analysis.Even on weekly Time frame , i found the break down is vey prominent. I feel the next weekly candle forming below the low of the current candle, its time to go for short.
    Like 1
  • Rakesh Sharma @Rakesh Sharma
    pls tell me about TTML share
    Like 0
  • Moin Shaikh @Moin Shaikh
    big red candle..
    Like 0
  • Ganapathy Raman @Ganapathy Raman
    yes yes ji
    Like 2

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