Technical Analysis

Today's Pick: Praj Industries (₹96.1)

Yoganand D BL Research Bureau | Updated on February 05, 2018 Published on February 05, 2018

Investors with a short-term perspective can sell the stock of Praj Industries at current levels. Following a medium-term uptrend from the October 2017 low of ₹61, the stock encountered a key resistance at ₹130 in early January this year. Subsequently, the stock changed direction triggered by negative divergence displayed both in the daily and weekly relative strength indices.

The stock has been trending down over the past three weeks. While trending down, the stock has decisively breached key supports at ₹115, ₹105 and ₹100. Moreover, the stock also trades well below its 21- and 50-day moving averages. Strengthening the short-term downtrend, the stock fell 4 per cent on Monday with an above average volume.

The daily RSI feature is in the bearish zone and the weekly RSI has entered the neutral region from the bullish zone. Both the daily and weekly price rate of change indicators hover in the negative territory implying selling interest.

Outlook is bearish for the stock. Traders can sell the stock with a stop-loss at ₹98.5. Short-term targets are ₹92 and ₹90.

(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)

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