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Wednesday, May 27, 2009

Today's Picks

1. Hotels, tour operators, business service providers, television broadcasters and even some software units (not part of STPI scheme) could gain from the latest move of the Government.


2. Sell Nagarjuna Construction




It is apparent from the charts of Nagarjuna Construction that it has been on an intermediate-term uptrend since its one-year low of Rs 34 recorded in early March. The stock’s uptrend accelerated in mid-May and it conclusively penetrated the key resistance at Rs 90, which has now turned in to a key support. However, around Rs 135, the stock met with significant resistance. On May 26, the counter tumbled 6 per cent, forming a bearish engulfing candlestick pattern. A negative divergence in the daily relative strength index triggered this reversal. Both daily and weekly RSI are declining from the overbought territory. Besides, the volumes have gradually dropped over the past six trading session. Our view for the stock is negative from a short-term perspective and we anticipate it to dive further until it hits our price target of Rs 110 in the trading sessions ahead. Traders with a short-term perspective can sell the stock while maintaining a stop-loss at Rs 128.

So, We recommend a sell in Nagarjuna Construction Company from a short-term trading perspective.

source: BL

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