The weakness in Consumer Goods we’ve been talking about since March and April continues, so today we want to look at a short opportunity in Godrej Consumer Products, which makes up roughly 5.50% of the Nifty Fast Moving Consumer Goods Index.
Here’s a daily chart showing the stock testing support near 630 for the fourth time since October, with each rally attempt being stopped at a lower level than the last. With momentum in a bearish range and the 200-day moving average now firmly downward-sloping, we want to be erring on the short side of this name.
Click on chart to enlarge view.
Given the relative weakness we’re seeing across space, we think this test of support at 630 fails and prices begin the next leg of their downtrend.
To express this thesis we want to be selling Godrej Consumer Products if we’re below 630 on a closing basis and taking profits at 495.
Thanks for reading and let us know if you have any questions!