Avanti Feeds enters oversold zone

Avanti Feeds, manufacturer, seller and exporter of Shrimp Feed and processed shrimp has seen a sharp decline in share prices since the start of May 2018. The stock has fallen more than 39 per cent in May and is one of the top mid-cap segment losers. The company witnessed deep fall after posting Q4 results on May 26. The company reported growth of 18 per cent in consolidated revenue but posted bottomline de-growth of 18 per cent as compared to Q3FY18. The stock did not bounce despite split, bonus approval by the board followed by dividend announcement.

Technically, the stock started trading with lower tops and lower bottoms after it hit an all-time high on November 13, 2017 at Rs. 2,940 per share on NSE. The stock kicked off a downfall on forming a bearish engulfing pattern on the same day. The stock eventually formed a downward sloping channel pattern. It had attempted a breakout at 2,383 on April 24, 2018. However, it was a whipsaw and the stock gave a constant fall since May 2. Meanwhile, it fell below its 50, 100 and 200-day EMA levels. The stock gave a channel pattern breakdown on May 28 at 1,875. Since then it has seen 5 consecutive negative closings, till date.

Going forward, if it falls further, we hold 1,440-1,420 as the support. In case it bounces back as the oscillators are lying in the oversold zone, we hold 1,640-1,700 followed by 1,755 as the resistance.