Downside target: Rs 3,400
Stop loss- Rs 3,640
Divis Lab is in a short-term downtrend as it has been making lower tops and lower bottoms for the last few weeks. On Friday, the stock broke the recent support of Rs 3,562, indicating the downtrend looks set to continue.
Technical indicators are giving negative signals as the stock is now trading below the 20-day and 50-day SMA. Momentum readings like the 14-day RSI are in decline mode, which implies potential for more downsides.
We therefore expect the stock to correct further in the coming sessions.
(Subash Gangadharan, Senior Technical and Derivative Analyst, HDFC Securities)
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)