NTPC

We recommend a sell in National Thermal Power Corporation (NTPC) from a short-term trading perspective. It is apparent from the charts that the stock was on an intermediate-term uptrend from its October 2008 low of Rs 113 to its January 2009 high of Rs 192. However, it reversed direction after encountering significant resistance at around Rs 192. From this resistance level, the stock has been on a medium-term downtrend. On March 5, the stock conclusively penetrated its 50-day moving average as well as the intermediate-term up trendline by tumbling 3.8 per cent. The volume was above average during the decline. The daily relative strength index is on the verge of entering into the bearish zone from the neutral region. Moreover, the moving average convergence and divergence indicator is signalling a sell and is on the brink of entering the negative territory. Taking into the consideration, the penetration of the up trendline, we are bearish on the stock. We expect the stock to decline until it hits our price target of Rs 155 in the approaching trading sessions. Traders with short-term perspective can sell the stock while maintaining a stop-loss at Rs 181.