InvestorQ : What happened to Airtel stock . Why it is going down day by day ? After AGR case,every one is bullish on it but it is completely reverse is happening . Thank you
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What happened to Airtel stock . Why it is going down day by day ? After AGR case,every one is bullish on it but it is completely reverse is happening . Thank you

Answer
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4 weeks ago


On charts, BHARTIARTL has technically become weak. Its rally from March 2020 lows could not penetrate the 70 levels on standard RSI. The highest it could reach was 68. (RSI followers may recall that the bull zone on RSI is 40 - 80, and in sustained uptrends, RSI reaches about 80 levels without much difficulty). Failure to reach 80 levels on RSI was the first caveat of the uptrend. After making the high of 612 on 20th May, price action has been to the sideways to downwards, for the rest of over three months.

During this sideways period price made a 71–day symmetrical triangle which broke down strongly & on a strong volume on 30th Jul. (Pl. check the pink arrow on price the chart) After the breakdown price consolidated for two weeks, basically testing the B/D trendline and then sold off to the lows of 27th Aug.

Moving to the RSI analysis, after making its high around mid-May RSI made four attempts, over a 40- day period, to escape from its bear resistance line of 60 but failed all the four times. (Pl. check the pink highlight on RSI 60 boundary during June – July). This is the second warning that momentum is not supportive of the uptrend. For about 2+ months RSI has been stuck between the 60 – 40 boundaries; and its effort to bounce from around 40 levels on 3rd Aug, could not push RSI above 50 even, further confirming the weakness of momentum.

On 13th Aug, RSI crashed below its bullish support level of 40, confirming a range shift, from an uptrend to down-trend. As this range shift was happening, the short-term MA on price crossed under the intermediate-term MA, indicating a change in the momentum to the downside, from short to intermediate-term perspective. You may also notice the slope of MAs has also turned down. I also identified IMP points of change in the structure on price & indicator with vertical red lines & all the 4 lines are supportive of declining prices.

Also, the directional bias has changed to the downside as price is below the monthly, weekly, & daily directional lines; and today’s close, in fact, changed the daily direction to the downside.

Amongst all this bearish commentary are there a few non-bearish aspects:

Price has been successfully taking the support of 200 DMA since April 2019; the support held and prices rallied substantially three times in the past - in April 2019, Oct 2019, and March 2020. Again, now for the fourth time, it is bouncing from the 200 DMA. Will it succeed in the 4th time? Can’t say but, going by the past performance I am inclined to wait for the weight of evidence to present itself, showing me the direction either way.