Asian Paints stock down 33% in 3 months; is the worst over? Tech view here

Asian Paints stock has been testing its 20-day daily moving average after a gap of three months. Chart shows near hurdle for the stock placed at Rs 2,397 above which a pullback rally seems likely.

The Asian Paints stock plunged 33.5 per cent from its peak of Rs 3,395 in September to a low of Rs 2,257 last month. In the process, the stock broke below its super trend line on the monthly scale for the first time in more than six years.  On the daily and the weekly scale the stock has been consistently trading below the key moving averages for the last three months.  However, on Friday, for the first time in little over three months, Asian Paints stock has managed to trade above its 20-day DMA (Daily Moving Average). The 20-DMA stands at Rs 2,343, while the stock thus far in the day has hit a high of Rs 2,349, and gained nearly 4 per cent from its recent low.  Does this signal that the worst is over for Asian Paints stock? Or is further pain likely? Here's what the technical charts suggest.  Asian Paints  Current Price: Rs 2,345  Upside Potential: 13.2%  Downside Risk: 8.4%  Support: Rs 2,255; Rs 2,148  Resistance: Rs 2,930; 2,440  Even as Asian Paints is seen attempting to conquer its 20-day DMA (the short-term moving average), the stock faces overhead resistance around Rs 2,397 - the super trend line on the daily scale. The stock will need to clear both, the 20-day DMA and the super trend line resistance, for hopes of a pull-back rally in the near-term.    As such, the stock can attempt a bounce to Rs 2,570 levels; above which a rally towards Rs 2,655 seems likely. Interim resistance for the stock can be expected at Rs 2,440.  The broader trend shows that Asian Paints stock seems to be seeking support around its 100-MMA (Monthly Moving Average). The 100-MMA stands at Rs 2,148, and the stock till date has never broken below the same. As such, technically this level becomes crucial for the stock.  For now, the 20-DMA at Rs 2,343 holds the key, as this also coincides with the lower-end of the Bollinger Bands on the monthly scale. Sustained trade below the same augurs well for the bears and vice versa. Interim support for the stock can be expected around the recent lows of Rs 2,255 levels. CLICK HERE FOR THE CHART  In case, the 100-MMA is violated it shall bring the 200-MMA into focus, which stands at a distance afar at Rs 1,285.