Tuesday, 15 September 2009

Prism Cement (Rs 52.9): Sell

We recommend a ‘sell’ in Prism Cement from a short-term perspective. It was apparent from the charts of Prism Cement that the scrip, after bottoming in October 2008 to a low of Rs 13.50; was on a strong uptrend. However, the stock encountered resistance in mid-August at Rs 60. After encountering resistance for the second time in early September, the stock changed direction. This trend reversal was triggered by negative divergence displayed in the daily moving average convergence and divergence. The stock has been on a short-term downtrend since then. While trending down, the stock penetrated its medium-term uptrend line and its 21-day moving average recently. The daily RSI is declining in the neutral region and weekly RSI began to fall from the overbought levels. The daily MACD has indicated a sell. 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 47.5 in the upcoming sessions. Traders with a short-term perspective can sell the stock while maintaining a stop-loss at Rs 56.

Source: thehindubusinessline

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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.