Technical Stock Pick: Power Finance Corporation
- The PSU stock (Power Finance Corporation Ltd) as per weekly timeframe has slipped into sharp weakness during this week and closed the week lower by around 6.57%, as per w-o-w basis
- We observe larger sideways range movement over the last few months and the attempt to show upside breakout from the range was not sustained.
- This pattern is indicating a weak upside strength in the stock price and currently the stock price has placed at the edge of breaking below the key support of Rs.112 levels (brown dashed horizontal line)
- Weekly 13 period -DMI has widened and made pivot high at 28 levels and the weekly 13 period ADX has turned up from near the key lows of around 11-12 levels. Both the indications are signaling that the downside momentum in the stock price could strengthen and one may expect sharp downside breakout soon
- Volume rose in last week during decline in stock price and further weakness below the support could possibly lead to further expansion in volume in coming weeks
- The overall negative chart set up is indicating a sell trade opportunity in PFC. One may look to sell this stock as per the levels mentioned above
Recommendation: HDFC Securities recommends investors to sell Power Finance Corporation between CMP & Rs.119.50 for targets of Rs 98/86 with a stop loss placed at Rs122.50 in 1-2 months.
Click here to read the full report