GSFC takes pause near 200-day SMA

Gujarat State Fertilizers Chemical is currently trading at Rs.110.65. After registering a 52-week low, the stock bounced sharply and thereafter it has been consolidating in a range. On the daily time frame, currently the stock is placed right at the edge of a multi touch point downward sloping trendline resistance formed by joining the swing highs from early May 2018 and it coincides by its long-term moving average, i.e. 200-day SMA.

The 14-period RSI cooled off after touching 60 zone and at present its reading is 56.59 and the volumes are low. The crucial short-term moving average, i.e. 21-day exponential moving average, is likely to act as a support. The stochastic has given negative crossover in overbought zone which predicts pause in the trend.

In the short term, we expect the stock is likely to consolidate near its immediate resistance zone placed around Rs. 113-Rs. 115. For any further upside, the stock needs to form sizeable bullish candle along with decent volumes above this resistance zone.