Adani Enterprises

We recommend a sell in Adani Enterprises from a short-term perspective. It is evident from the charts of Adani Enterprises that the stock has been on a medium-term downtrend from its May high of Rs 897. The stock has been recording lower peaks and lower troughs since then. During late July, the stock tumbled steeply, penetrating the 21-, 50- and 200-day moving averages conclusively. We note that the stock has failed to surpass the 50-day moving average since this penetrati on. On August 26, the stock declined 5 per cent accompanied with heavy volume and it is trading well below 21- and 50-day moving averages. With this recent decline, the daily relative strength index has entered into the bearish zone and the weekly RSI is on the verge of entering this zone. The daily moving average and convergence and divergence is signalling a sell. The medium-term down trendline is intact. Our short-term forecast for the stock is bearish. We expect the stock’s decline to prolong until it hits our price target of Rs 530 in the approaching trading sessions. Traders with short-term perspective can sell the stock, while maintaining a stop-loss at Rs 612.

via BL