Ashok Leyland - Support Level Reached

Ashok Leyland has reached its support level. The stock could not maintain its recent rally for long. The stock has retraced to 61.8% of its recent high of Rs. 50.

• MACD which was close to giving a 'buy' call has since been on the negative side.
  
• RSI is on a comfortable zone that can lead to a oversold condition of the stock, something that I shall not expect for now.
• Accumulation Distribution chart is still largely unclear. The small spike could be of little significance unless this range is broken and convincingly.
  

The stock has now entered a range that it found difficult to get past last time. What is important to note would be the pace at which it is moving in this segment. If the pace is moderate, then it would be a wait and watch. If the pace is faster and on the downside, then the stock would fall to Rs. 40 where it has the next set of support points. On the upside the stock could get back to Rs. 45.