In its latest rally, within a short period of five weeks, the share price of Finolex Cables has jumped from Rs 111 to Rs 190. However, the current position of several oscillators show that the stock is in for a technical correction.Divergence shown by the RSI (relative strength index, 5-day, 10-day and 21-day) is the main factor which is hinting at the weakness. At the same time, the medium term MACD (moving average convergence divergence) has dipped below the trigger line in overbought zone.
Although averages are in positive phase (12-day average is above 48-day average), the current position of oscillators hint at a price fall. Book profit at the current level of Rs 173, at least partially.
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