After a sharp downside rally. Siemens took a v shape reversal from the lower levels to achieve its 38% of the retracement levels on the chart. Now the stock is ready for another downside move in this lockdown 3.0. On the weekly chart, the stock looks weak and ready to give a sharp breakdown below 1030 levels.
Siemens Ltd is one of Indian’s leading manufacturers of electronic and electro-technical equipment. Today, Siemens has 22 factories located across the country, Eight Centres of Competence, 11 R&D centers, and a nationwide sales and service network. India accounts for 81.5% of net sales.
Net sales break down by sector of activity as follows:
•Fossil power generation (36.8%): individual gas and steam turbines, generators, instrumentation and control systems, etc.
•Power transmission, mobility, and building technologies (34.3%): power transmission and distribution systems, rail automation systems, railway electrification equipment, electrical installations, miniature circuit breakers, distribution boards, residual current circuit breakers, etc.
•Industry automation and drive technologies (28%): industrial automation systems, low-voltage switchgear, large and standard drives and motors, special purpose motors, process and motion control systems, etc. The group also provides engineering, procurement, installation, and commissioning of turnkey projects products in the industrial and infrastructure sectors.
Now in the current situation, all the running projects, as well as any new projects of the company, got stopped due to coronavirus pandemic. And from the last twelve months, the trend in sales revisions has been going down which also impacts the yearly result 2019—20. As far as lockdown continues the company gets affected by the situation.
Technical View of Siemens
On the technical front, the stock looks weak on the weekly as well as on the daily chart. As we have seen on the above chart, the stock has achieved its 38 % of retracement level and after than formed three black crows (continues three red candle formation) which indicates a weakness in the stock.
Major indicators like RSI and MACD indicate a bearishness in the stock with a supportive volume on the chart. We have plotted two moving averages of 20 and 50 days which shows a negative crossover for a new downside rally in this stock.
Trading Recommendation on Siemens
Traders can sell this stock below 1030 levels. If it breaks and closes below 1030 levels then we will expect a sharp downside rally in this stock till 950 and then further to 930 levels in the coming days.
Hurdle and stop-loss above 1120 levels on a closing basis.