Stock watch: Right time to go short on Vaibhav Global?

Vaibhav Global has breached the crucial support zone.

Vaibhav Global created good wealth in just one year. Those investors who invested at its low of 88.15 in March 2020, as of May 2021 would have seen their wealth grow 11-times. In May 2021, the stock made a high of 1046.85. However, the stock took a breather and skidded almost 21 per cent in the month of May 2021. And since then, it is hopping southwards. Moreover, the week started October 25, 2021, the stock pierced its crucial support level signalling more fall coming way.  

Vaibhav Global Limited indulges itself in the global retail space, especially in the jewellery, accessories and lifestyle product segments in the US and UK.  

The stock’s strong support zone is placed at 714-694 levels. This support zone is respected by the stock since March 2021. This support zone was breached by the stock on October 25, 2021. Fascinatingly, on October 27, 2021, the stock tried to move up and breach the above-mentioned support turned resistance zone. But failed miserably to do so and again headed southwards.  

Hence, it seems that this can be a good opportunity to go short on this stock. However, every coin has a flip side and this stock is not different. The stock’s immediate resistance zone is 649-681, whereas 694-714 levels are its short-term resistance zone. Breaching these levels would mean that the bearish view has failed. Interestingly, presently the stock is trading near 567.5, which is its crucial Fibonacci level of 50 per cent. So, the chances of stock retracing from this level cannot be ignored. Said that, if the stock pierces this level, then the stock might chase 454 level. 

Above is the weekly chart of Vaibhav Global Limited. 

On daily charts, the stock is trading below its 50-Day Moving Average (DMA) as well as its 200-DMA. However, as of now, there is no negative crossover of these two moving averages has been witnessed. The Relative Strength Index (RSI) is at 34.3, which is near the oversold zone (30). Hence, while going short on Vaibhav Global, adhering to strict stop losses is extremely important.  

At the time of writing, the stock of Vaibhav Global was trading at 580.15.