Can Dabur hold its long-term 15-year old support? Chart check here

Dabur has been trading with a negative bias for more than a month, further its alleged involvement in the illlegal betting app may dent sentiment. However, support at Rs 517 is the key, shows chart.

Shares of Dabur India sank 2.5 per cent to Rs 516.60 on the BSE in Wednesday's intra-day trades despite strong gains in the overall market as the group's name got entangled in the an allleged illegal cricket-betting app controversy.

According to the FIR, filed on November 7, the Mumbai police have registered a complaint against 32 people, including the promoter of the Mahadev app, under various sections of fraud and gambling. Reportedly, the police have named Mohit Burman, chairman of the business group; Gaurav Burman, director of the group; and others in the FIR.

The family said vested interests were behind the police complaint and they wanted to scuttle their (Dabur’s) move to acquire Religare Enterprises, a financial services company.

“We have not received any formal communication on any such FIR (first information report). However, we have seen the FIR, which is being circulated to media houses. The FIR is patently false and baseless. Nothing could be further from the truth than what has been wrongly stated in the FIR,” said a spokesperson for the family, referring to the police document. READ

That apart, the homegrown FMCG major Dabur is taking its spice brand Badshah to overseas markets, and hoping it to contribute around 4 per cent to international sales this fiscal.

Meanwhile, here's how the stock seems placed on the chart:

Dabur

Current Price: Rs 523

Support: Rs 517; Rs 490

Resistance: Rs 527; Rs 540

Following today's decline, the stock is presently trading below its key moving averages on the daily chart. The 20-DMA (Daily Moving Average) at Rs 527  is likely to act as an immediate resistance for the stock. Further, the stock has been trading for more than a month below its 200-DMA, which now stands at Rs 540, thus highlighting the weak undertone at the counter.

However, the stock is presently seen testing support around its 50-MMA (Monthly Moving at Rs 517-odd levels. On the longer-term scale, the stock has consistently found support around the 50-MMA since December 2008 2016. Hence, this level needs to be closely watched by investors. CLICK HERE FOR THE CHART

Given the negative bias on trend indicators, if the stock fails to hold support at Rs 517, it could slip towards Rs 490 level - wherein stands the lower-end of the Bollinger Bands on the monthly chart, a close below the same could signal major worries for the bulls.

On the upside, the stock needs to climb a wall of worries, starting with the 20-DMA at Rs 527. In best case scenario, an upside towards to Rs 585 level seems likely.