Bharti Airtel - Will The Support Level Hold?

Shares of Bharti Airtel, India's Number 1 Telecom Company closed at a lower level of 358.70 down 8.5% W-o-W (Week-on-Week). The TRAI's proposal to remove roaming charges for consumers and the 2G Scam inquiries seems to be couple of reasons for weakness in the stock.




Charts

1.1 Weekly Charts

Bharti Airtel for the past 24 months is moving in a Rising Trend Channel (Channel Width of 120 points). Currently on the Weekly charts the Stock Price stands at the bottom trendline with a crucial support level of 350-355. 

Indicators: RSI has gone below Signal line & heading downwards (Signalling strong selling pressure.

1.2 Daily Charts

Triangle breakdown seen on charts. Also in the current week the stock has moved below 50-Day & 200-Day EMA.

1.3 Hourly Charts

Stock is in a Falling Trend Channel since 5-Dec-2011. 355 would be the level to watch on monday. If held then can rally till 370 (Stiff resistance would be faced at this level followed by 385 levels (200 Hour EMA). Till the Trend channel is not breached the weakness would drag the stock further down.

Indicators: MACD is in Sell Mode (below Zero line). RSI & William's %R have come out of the oversold levels.

1.4 Volume Profile Charts

Volume Profile charts indicates the Volumes at each price level. If Price is above the High volume level then it would act as a Support & if Price is below the High volume level then it would act as a Resistance. 

In the current case of Bharti Airtel, the High volume levels come around 378-387. Price is at 356. So the supply zone would be around 378-387 if in turn we bounce from the current levels.

Two scenarios can play out here.
Scenario - A: A closing below 355 levels would open up the gate for 343 (200 Week EMA), below this level it can move swiftly to 315-310 levels.

Scenario - B: Demand comes in around 350-355 levels & stock rallies to 380-390 levels.

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Bottom Line: Stocks tend to bounce from their critical supports when its moving in a Trend channel but in the current grim scenario in the markets & the way the charts are positioned  "Probability of Scenario-A seems more likely than Scenario-B".