Cummins India (Rs 216.75): Sell

We recommend a sell in Cummins India from a short-term perspective. It is apparent from the charts of Cummins that after recording a 52-week low of Rs 192 in late October, the stock rallied up to Rs 254. However, the stock witnessed resistance at this level and resumed its medium-term downtrend that is in place since September peak of Rs 330. Reinforcing the downtrend, the stock breached the 21-day moving average by tumbling 6 per cent on November 17. Moreover, the stock has been on a long-term downtrend from its October 2007 high of Rs 462, forming lower bottoms and lower peaks. The daily RSI has entered into the bearish zone and weekly RSI is featuring in this zone. Considering that the medium-term down trendline continues to be intact and the long-term trend also is down, we are bearish on the stock from a short-term perspective. We expect the stock’s decline to prolong until it hits our price target of Rs 194 in the approaching trading sessions. Traders with short-term perspective can sell the stock while maintaining a stop-loss at Rs 227.

Source: TheHinduBusinessLine