Ashok Leyland

We recommend a sell in Ashok Leyland from a short- and medium-term perspective. The stock has been charting a strong up-trend since its January trough of Rs 13.4. The rally that ensued from this level has resulted in a retracement of over 50 per cent of the decline from January 2008 peak. The stock has significant long-term resistance at Rs 37 and the rally from January lows could have ended at the recent peak of Rs 37.9. The bearish engulfing pattern in the weekly candlestick chart and sell signals in weekly as well as daily oscillators support this view. Investors with a short-term perspective can sell the stock with a stop at Rs 34.2. We expect a decline to 29.4 in the near term. The medium-term target for this stock is Rs 26.
via BL