We recommend a sell in Hindustan Zinc from a short-term perspective. It is visible from the charts of Hindustan Zinc that it has been on a long-term downtrend, since its 52-week high of Rs 969 marked in October 2007. However, in early April 2008, the stock found support at around Rs 500 level and then it went through a short-term corrective rally. We see that the stock's corrective rally has encountered twin resistance at around Rs 690 levels (a key resistance as wel l as the long-term down trendline that coincides around this level) on April 29 and reversed direction, forming a bearish engulfing pattern near the resistance level. The daily momentum indicator has begun to decline after touching the overbought territory in recent times. Moreover, the long-term down trendline of the stock is still in place. We are bearish on the stock in the short-term. We expect the stock's long-term downtrend to prolong to our target price level of Rs 580 in the upcoming trading sessions. Investor with short-term perspective can sell the stock while keeping the stop-loss at Rs 708 level.
Wednesday, April 30, 2008
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment