If you see the long term chart of CUMMINSIND , you would find that the stock has been witnessing a sideways movement making higher lows and lower highs.
The internal built of the first leg from the low of 746.15 to the high of 947 and third leg from the low of 747.55 to 921 looks like impulsive movements, please refer to the chart for the reference. Let us name those impulsive movements wave 'a' and 'c' for time being
Now, if you see the chart, whereby a resistance line has been drawn conjoining the two tops of these two impulsive movements, 947 and 921, end point of 'a' and 'c', the stock has reached/ touched the resistance line and may find a strong resistance over this point.
This is a suitable point where traders can sell or go short on this stock at current price of 910 for an immediate targets of 880, 860 and 840 with the stop loss of 918 on upper side.
Stop Loss : 919 (above 918)
Here is an update on Cummins India. As in this post we noticed that the stock was taking resistance at the resistance line drawn and was reluctant to move above it until today. However, the stock gave a break above the level of resistance line making a high of 929.90 as against its previous high of 921 of it current bullish trend start from the low of 747.55. Though, the stock made a new high its one of the technical indicators, MACD, has reacted or shown less interest of improvement against its price rise compared with its previous high price of 921. When we see a lower MACD than its previous level against the higher price than its previous level, it gives rise to a negative divergence, an indication of selling the stock at current level.
Below is the daily time bar chart of Cummins with possible wave counts shown on the same. Please, refer to the same. Regards!
Sell Cummins India @925, Target 700 Stop Loss 954.
Current market price : 928