HAL shares nosedive 28% from peak. Will it fall below Rs 4,000?

Shares of Hindustan Aeronautics (HAL) have been making lower tops and lower bottoms on its daily chart, having taken a fall after hitting an all-time high of Rs 5,674.75 in July this year.

Since then, the stock has corrected by almost 28% since then and by 8.15% in the last one month.

On the stock’s daily chart, the shares price recently encountered a resistance near the Ichimoku cloud, which led to a correction of around 6-7% in just a week’s time. Additionally, the stock tried taking support at its 200 day exponential moving average (DEMA), but failed to do so in Wednesday’s session.

Now, the stock is below all its significant short, medium and long term EMAs.

“Currently, it is finding support in the 4000-4100 range, which aligns with the 200-day exponential moving average (DEMA) high-low band. Additionally, on the hourly chart, a hidden bullish divergence has formed, suggesting a potential bounce toward 4300 in the coming sessions,” said Jigar S Patel, Technical Research Analyst at Anand Rathi Shares and Stock Brokers.

Also read: Nifty Bank bids farewell to weekly expiries from today. So no more F&O losses?

Therefore, Patel suggests that the stock provides an opportunity for a long position for an upside target of Rs 4,300 and a stop-loss set below Rs 4,000 on a daily close basis.

The stock is also at a critical support near the Rs 4,165- 4,070 zone, which is also close to the above-mentioned 200-DEMA at Rs 4,240.

“A decisive close below Rs 4,100 could intensify the downside pressure, potentially driving the stock toward the Rs 3,700- Rs 3,850 range. On the upside, any rebound may face significant resistance in the Rs 4,400-4,650 zone, said Ajit Mishra – SVP, Research at Religare Broking.

Mishra advised traders to adjust their positions based on these levels.

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