Sugar stocks under pressure after a splendid run!
Last Updated: 24th January 2022 - 04:12 pm
After their splendid run, market participants decided to exit their position from this sector as sugar stocks were one of the worst performers on Monday.
The sugar stocks have been in focus lately as they shot up about 10-20% in their recent run-up. However, after a huge sell-off on Monday, the sugar stocks were under severe pressure as they fell over 5-6% on average. After their splendid run, market participants decided to exit their position from this sector as sugar stocks were one of the worst performers on Monday.
Eid Parry, one of the market leaders in the sugar industry came under severe selling pressure as it slipped over 6%. Along with it, popular stocks like Balrampur Chini and Triveni Engineering fell about 6% and 9%, respectively. Moreover, most of the sugar stocks ended at their day’s low and with this, the interest in the sugar stocks have been dented.
Most of the sugar stocks fell below their 20-DMA, which brings bearishness to the sector. Thus, sugar stocks will be in focus for a few days, but with a bearish view. Eid Parry, being the sector leader, will be under pressure for a few more days. The stock of Eid Parry had zoomed nearly 24% at the start of January. However, today’s sell-off saw the stock slip below its 20-DMA and 50-DMA, only to take support at 100-DMA. Along with this, RSI has dipped towards 44 and signals weakness in the stock. To add further, the MACD has given a bearish crossover and signals a sell-view. Above-average volumes make the matter worse as it indicates a larger sell-off by the market players.
Such drastic change of sentiment in sugar stocks can be attributed to the huge profit booking of the participants that enjoyed the momentum recently. These stocks show no sign of recovery and with this, traders are advised to trade with caution in sugar stocks as they might experience a downtrend for a few more days.
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