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Monday, May 25, 2009

Today's Pick


Tata Tea (Rs 688.8): Sell


We recommend a sell in Tata Tea stock from a short-term trading perspective. It is apparent from the charts of Tata Tea that it has been trending up since November 2008 low of Rs 430. However, the stock encountered significant resistance around Rs 750 recently and reversed direction. This reversal was triggered by a negative divergence displayed in the daily relative strength index (RSI). On May 19, the stock tumbled 5 per cent losing its bullish momentum. We notice formation of bearish engulfing candlestick pattern both in daily and weekly charts that indicates short-term reversal. The price rate of change (ROC) indicator has entered the negative territory, signalling selling interest. The daily and weekly RSI had entered the neutral region from the bullish zone. Our short-term outlook on this stock is bearish. We expect its decline to prolong until it hits our price target of Rs 620 in the forthcoming trading sessions. Traders with short-term trading perspective can sell the stock while maintaining a stop-loss at Rs 721.


We recommend a sell in Tata Tea stock from a short-term trading perspective. It is apparent from the charts of Tata Tea that it has been trending up since November 2008 low of Rs 430. However, the stock encountered significant resistance ...


source: Businessline

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