MTNL scrip to remain bearish

Deepak Singh Tanwar

October 20: The current position of MTNL suggests that the stock will remain bearish in the near future. The stock has broken its 4-month upward trendline, a sign of weakness. Although the stock has managed to post higher bottoms in the past six months, it failed to post higher tops. In fact, it has posted lower top which is not a healthy sign. The bearishness is further confirmed by the recent breach of short-term trendline.

The stock had fallen from Rs 284 in April this year to Rs 149 in June. The rally from this level took the stock to a high of Rs 230. The second top during last rally, however, was lower at Rs 224.

The breach of trendline has also brought the moving averages into negative phase. The medium term MACD is already in negative phase and is below the triggerline. The position of 21-day RSI is equally bearish. Overall, the downtrend in the stock is likely to continue. As such, an exit at the current level is recommended. Re-entry can be considered at later stage.

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