In fact, it fell below its previous bottom of Rs 6.90. However, the position of oscillators suggests that the negative trend is likely to reverse and the stock may witness a sharp rally in the near future.

Indications of an expected rally are evident from the divergence shown by the price chart and the RSI (relative strength index) indicator. When the stock price posted a lower bottom, daily as well as weekly RSI have formed a higher bottom. This goes to show that the decline is coming to an end.

Moreover, since the fall has been more than 60 per cent, even if it shows a 33 per cent recovery from its previous fall, the target can be placed at around Rs 10. Investment at the current level can bring decent returns in the short run.