Technical Analysis Chambal Fertilisers & Chemicals Ltd.

The stock

powerful bull run that pushed the price near 740 the stock entered a prolonged correction phase forming a pattern of lower highs and lower lows. However the recent weekly candles indicate that the heavy selling pressure has paused. The stock is currently trying to consolidate and build a solid base. Demand Zone the 400 to 420 range is acting as a very strong support. The price has tested this area recently and bounced off it showing that buyers are stepping in at these lower levels. Supply Zone the immediate hurdle is around the 500 to 520 level. The stock needs to cross and sustain above this area to break its current negative structure. For short-term buyers taking a small position near current levels for a pullback trade is an option though a much safer entry emerges only after a weekly close above the 500 mark. Existing holders should patiently hold their positions since the stock is actively defending its major demand zone and attempting to form a solid base. It is crucial for both new buyers and existing holders to maintain a strict closing-basis stop-loss below the 400 level to protect their capital. If this support holds strong we can expect a short-term upward move testing the 500 to 520 resistance area. Technical analysis is based on historical patterns and does not guarantee future results. Always use a Stop-Loss to manage your risk.