Chart Check: Shree Cement breaks down from lower channel on weekly charts; time to sell?

The stock hit a 52-week high of Rs 27,013 on 21st February 2023 but it failed to hold on to the momentum. The stock closed at Rs 24,254 which translates into a fall of about 10%.

The stock found support above the 200-WMA in April 2023 and again in May 2023.

If the stock failed to hold on to the 200-WMA placed around Rs 23,562 further selling pressure could take it towards Rs Rs 23,200, suggest experts. The stock closed at Rs 24,254 on 19th May 2023.

The stock is displaying signs of bearishness. It has fallen nearly 2% in a week and over 3% in a month. In the last 3 months, the stock is down by over 5%.

In terms of price action, the stock is trading below 5,10,30 and 50-DMA on the daily charts. It is trading above the 200-DMA and 20-DMA.

Short term traders can look to go short on the stock on a rise towards Rs 24,300, suggest experts. However, a close above Rs 24,900 means that bulls are ready to take control and all bearish positions must be squared off.

After a 10% rise in Nifty, the index has witnessed selling pressure from the resistance of the Rs 18,450 level. It has breached the rising wedge pattern and the previous week’s base, which indicates short-term negativity.

“Many cement stocks are trading at resistance levels and showing weak relative strength. Among the cement stocks, Shree Cement is displaying a bearish sign across all the time frames,” Kapil Shah, Technical Analyst, Emkay Global Financial Services and Trainer at FinLearn Academy, said.

“For the past 3 months, stock has been making a similar high at the resistance level. It shows the dilution of the buyer’s strength. On a weekly chart, the Stock has formed a distribution pattern followed by downward movement,” he said.

“The stock has breached the channel on the lower side which is a bearish continuation sign. Based on a top-down approach and multiple time frame analysis, stocks seem to be under a bear’s grip,” highlighted Shah.

“Based on the aforementioned rationale, stock can be looked for a short opportunity at the Rs 24,300 level with a stop loss of Rs 24,900 and a target at Rs 23,200. Duration of trade can be up to 1 to 2 months,” he recommends.

(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of Economic Times)