Bearish Trend Testing Key Support LevelsKey Observations:
Downward Channel:
The price is moving within a defined downward-sloping channel, indicating a bearish trend.
The upper boundary of the channel near 570 INR is acting as resistance, while the lower boundary could act as support.
Fibonacci Levels:
The price is currently near P Fibonacci support (~510 INR).
A breakdown below 510 INR could lead to the next support at S1 (~430 INR).
Consolidation Zone:
The stock had been trading between R1 (~651 INR) and S1 (~425 INR) before breaking into the downward channel.
Resistance levels to watch: 570 INR (channel resistance) and R1 (~615 INR).
MACD Indicator:
MACD shows strong bearish momentum, with the MACD line below the signal line and a red histogram.
Momentum remains negative, suggesting further downside unless a reversal occurs.
Volume and Price Action:
No significant volume spikes indicate a lack of strong buying support currently.
Recent candles suggest selling pressure dominates, with no reversal patterns forming yet.
Potential Scenarios:
Bearish Continuation:
If the price breaks below 510 INR, the next critical support level is at 440 INR (S1 Fibonacci level).
A further breakdown could extend the decline toward S2 (~370 INR).
Bullish Reversal:
A reversal pattern (e.g., hammer, bullish engulfing) near 510 INR could signal a recovery toward 570 INR (channel resistance) or even 615 INR (R1).
A breakout above 570 INR would indicate a potential end to the downward trend.
Conclusion:
REC Ltd is in a bearish trend, trading near key support levels. A breakdown below 510 INR could lead to 440 INR, while a reversal at this zone could signal recovery. Traders should monitor the 50 INR level closely for confirmation of direction.
