Monday, 27 October 2008

Punjab National Bank (Rs 419.60): Sell

We recommend a sell in Punjab National Bank from a short-term trading perspective. It is evident from the charts of Punjab National Bank that it was on a broad sideways consolidation in the range between Rs 440 and Rs 530 between late July and late October. The stock failed to surpass the upper boundary (Rs 530) of the sideways consolidation during mid-October and started to decline.

Subsequently, the stock penetrated the 21- and 50-day moving averages by tumbling over 6 per cent on October 22. Moreover on October 24, the stock conclusively broke out of the sideways consolidation by slipping 11 per cent, along with the broad market sell-off.

The daily relative strength index (RSI) has entered in to the bearish zone and the weekly RSI is on the verge of entering this zone. Furthermore, the moving average convergence and divergence has entered the negative territory, indicating a sell. Our short-term forecast for the stock is negative. We expect the stock’s decline to prolong until it hits our price target of Rs 375 in the upcoming trading sessions. Traders with short-term perspective can sell the stock while maintaining a stop-loss at Rs 440.

Source: HinduBusinessLine

No comments:

Post a Comment

DISCLAIMER: The author is not a registered stockbroker nor a registered advisor and does not give investment advice. His comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to buy or sell a stock, option, future, bond, commodity, index or any other financial instrument at any time. While he believes his statements to be true, they always depend on the reliability of his own credible sources. The author recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction, before making any investment decisions, and that you confirm the facts on your own before making important investment commitments.