Today's Pick - Central Bank of India

We recommend a sell in Central Bank of India from a short-term perspective. It is evident from the charts that the stock has been on an intermediate-term downtrend from its 52-week-high of Rs 154 recorded in early January 2008. However, after marking a one-year low at Rs 73 in March, the stock began moving higher till it encountered resistance at around Rs 100 level.

Subsequently, the stock failed to exceed that resistance level and resumed the downtrend. The daily and weekly relative strength indices are featuring in the bearish zone. Besides, the moving average convergence and divergence has re-entered the negative territory indicating bearishness. The stock is also trading well below the 21 and 50-day moving averages at present. In the short-term, we are bearish on the stock and expect it to decline further until it hits our price target of Rs 78 in the coming days. Traders with short-term perspective can sell the stock while keeping the stop-loss at Rs 89.

via BL