ITC breaks 20 and 50 days moving average followed by Bearish Engulfing

ITC Ltd (NSE:ITC, BSE:500875), one of the strongest stock in the Indian stock market have given up the momentum after hitting all time high. Friday ITC has formed Bearish Engulfing in the candlestick chart when Nifty index closed near 2% up. Today Nifty has extended the profit, but ITC has extended the loss by breaking 20 & 50 days moving average.

Today ITC is the biggest looser in the Nifty 50 stocks. It went down by 14.95 points or 5.57% and closed at 253.30. The 100 days moving average comes around 250 levels. If that holds then this fall can be considered as profit booking and stock will resume the original direction in the near future. If 100 days moving average breaks on weekly basis, the the stock may head south. Today ITC had notable volume as well.

Other oscillators like MACD, RSI and Momentum indicators are all already showing weakness in the chart. If 250 breaks, the ITC may have next intermediate support around 225-220 levels.

Muthuraj Paulraj

Passionate about investing and trading in Options.