When a stock that has already made a top and has a questionable fundamental situation, it faces a stiff challenge near the Line of Resistance.
Maruti has now well-defined Line of Resistance
As you can see in the chart above – Maruti stock has a line of resistance at 7770
What does this mean?
It means anybody who has Maruti stock should be better off selling the stock as it runs towards this resistance. Risk seeking traders will be inclined to short the stock near this level. And any investor would be better off not considering the stock as it trades below the Line of Resistance.