HFCL shares extended their decline for a second straight session on Thursday, falling as much as 5 percent after hovering near a multi-month high.
The stock hit its 5 percent lower circuit at Rs 201.49 per share on the NSE in early trade. However, buying emerged at lower levels, and the stock was trading at Rs 202.15, down 4.69 percent, at around 2:05 p.m.
The decline comes after the stock touched a multi-month high.
HFCL shares have surged 181.97 percent in the last three months. Over the past six months, the stock has gained 198.66 percent, compared with a 9.8 percent decline in the benchmark Sensex during the same period.
According to Virat Jagad, Senior Technical Research Analyst at Bonanza, HFCL has witnessed a sharp 6 percent decline this week following a strong vertical rally, indicating profit booking near the long-term rising trendline resistance zone of Rs 210-220.
Despite the recent correction, the broader trend remains positive as the stock continues to trade above its 20-, 50-, 100- and 200-week moving averages, indicating underlying strength, he said.
Jagad said the weekly relative strength index (RSI) has moved lower from overbought levels but remains in the bullish zone, suggesting that momentum is easing rather than reversing.
He said immediate support is seen at Rs 185, followed by Rs 170. A sustained move above Rs 220 could pave the way for the next leg of the rally towards Rs 240-250 over the medium term.
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