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Investors with a short-term perspective can consider selling the stock of Oriental Bank of Commerce at current levels. Since recording a 52-week high at ₹190 in early May 2017, the stock has been on a medium-term downtrend. Key resistance at around ₹157 capped the stock’s upside in early June and again in late July.
After forming a bearish engulfing candlestick pattern in the key resistance level of ₹157, the stock started to decline. It has been on a short-term downtrend since late July. While trending down, the stock emphatically breached its 21 and 50-day moving averages and hovers well below them.
On Thursday, the stock fell 4 per cent with above average volume, breaching a key medium-term support at ₹140. This fall has strengthened the stock’s medium-term downtrend. The daily relative strength index has entered the bearish zone from the neutral region and the weekly RSI is charting downwards in the neutral region.
Both the daily and weekly price rate of change indicators are featuring in the negative territory implying selling interest. The short-term outlook is bearish for the stock. It can continue to decline in the reach the price targets of ₹132.5 and ₹129.5 in the coming trading sessions. Sell the stock with a stop-loss at ₹141.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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