Everest Kanto

We recommend a sell in the stock of Everest Kanto Cylinder from a short-term perspective. The stock's primary trend is down since January 2008 peak of Rs 385, shaping lower peaks and troughs. Moreover, after encountering resistance at around Rs 210 in September 2009, the stock has been on a medium-term downtrend. Last October, the stock conclusively penetrated 200-day moving average and is trading well below its long-term and short-term averages. The stock decisively broke through a significant long-term support level at Rs 135 on January 28, plunging 5 per cent and is currently trading below this level. Both the daily and weekly relative strength indices are in the bearish zone. The daily moving average convergence and divergence has signalled a sell and hovering in the negative territory. The weekly MACD also is hovering in the negative territory. Our short-term forecast is bearish for the stock. We expect its decline to prolong until it hits our price target of Rs 115. Traders with short-term perspective can consider selling the stock while maintaining stop-loss at Rs 134.

via BL