Today's Pick - Bharat Forge

We recommend a sell in Bharat Forge from a short-term perspective. The stock had been on a medium-term uptrend between mid March and early May, from the trough at Rs 245. However, the stock encountered resistance at Rs 310 during early May and reversed direction.

On May 13, the stock tumbled penetrating the medium-term up trendline. Following a pullback rally till the up trendline, the stock once again began to decline resuming the downtrend.

The stock fell more than 3 per cent on May 22. The relative strength index is featuring at around 40 levels and is on the verge of entering the bearish zone. We notice a crossover in the daily moving average convergence and divergence and it is declining in line with the stock price, indicating bearishness.

We are bearish on the stock in the short-term. We expect the stock’s down move to continue until it hits our price target of Rs 260 in the upcoming trading sessions. Traders with short-term perspective can sell the stock while keeping the stop-loss at Rs 294.

via BL