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Godrej Consumer Hits A Death Cross First Time In Nearly Two Years

Shares of Godrej Consumer Products Ltd. have tumbled more than 25 percent from its record high on Sept. 3. Still, further weakness may be in store.

The stock of consumer goods maker today hit the death cross. Its 50-day moving average fell below the 200-day reading the first time in 23 months—a bearish signal.

Godrej Consumer Hits A Death Cross First Time In Nearly Two Years

After a sharp correction, the stock is currently offering an immediate resistance at Rs 730-740 apiece, according to Dyaneshwar Padwal, assistant vice president and technical analyst at KIFS Securities. “One can definitely go short from those levels and look for targets of Rs 660-650.”

Aditya Agarwala, technical research analyst at Yes Securities, agrees. The stock is currently facing resistance at Rs 722-725, he said. If it does not sustain at these levels, “downward trajectory could resume and one can look to short from that level for the target of Rs 640.”

Shares of Godrej Consumer tracked the correction in India’s equity markets since August end, and also came under pressure after the company’s profit, operating income and margin missed estimates in the quarter ended September.

Still, 42.5 percent of the analysts surveyed by Bloomberg have a ‘Buy’ rating on the stock and 50 percent suggest ‘Hold.’ Only 7.5 percent recommend ‘Sell’.