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| Eicher motors Weekly Chart (Chart source: Investing) |
Eicher Motors has been in a steep downtrend over the past few weeks. The decline has now approached a crucial infliction point, as can be seen in the chart above. A couple of key supports are seen confluencing around 26000.
The first is the rising support line that connects the January 2016 and November 2016 lows, while the second is the horizontal support line that was formerly an area of resistance which is now turned into support. Furthermore, there is a positive reversal between price and RSI, as the lower low in RSI between November 2016 and now has been accompanied by a higher low in price, indicating that the stock has got oversold at a higher level. Based on all this, I feel that as long as the stock does not give a weekly closing below 26000, a short-term pullback looks likely possibly towards 28500-29000 range. On the flip side, a weekly closing below 26000 will signal at a continuation of the downtrend.
The first is the rising support line that connects the January 2016 and November 2016 lows, while the second is the horizontal support line that was formerly an area of resistance which is now turned into support. Furthermore, there is a positive reversal between price and RSI, as the lower low in RSI between November 2016 and now has been accompanied by a higher low in price, indicating that the stock has got oversold at a higher level. Based on all this, I feel that as long as the stock does not give a weekly closing below 26000, a short-term pullback looks likely possibly towards 28500-29000 range. On the flip side, a weekly closing below 26000 will signal at a continuation of the downtrend.
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