The price of Guarseed have witnessed a strong rally from the lows of Rs 2907 levels as on 18th April, 2011 to register a high of Rs3364 levels as on 20th Jun, 2011. Since then the price of Guarseed has been consolidating within broad ranges of Rs 3234 to Rs 3360 levels. But, the key observation to be made is that the price of Guarseed has formed a head and shoulder pattern on the intraday charts. A breakdown from the said pattern would be confirmed when the price breaks below the neckline level of Rs 3234 levels. The MACD indicator is also in sell mode. The prices of Guarseed will face severe selling pressure once it starts trading below the neckline level of Rs3234 levels.
We recommend traders to go short below Rs 3234 levels with a stop loss of Rs 3274 levels for downside targets of Rs 3190/ Rs 3175 levels.
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