Indian Bank - SELL

We recommend a sell in Indian Bank from short-term perspective. It is clearly apparent from the charts of Indian Bank that it had been on a medium-term uptrend between mid July and early September from Rs 78 (a 52-week low) to a high of Rs 142.

However, the stock met with a key resistance at Rs 140 levels and started to decline. Recently the stock began to loss its bullish momentum by breaching the medium-term up trendline and subsequently the 21-day moving average. We also observe that the daily volume has been shrinking over the past one week.

On September 29 the bank tumbled 6 per cent, reinforcing the bearish momentum. The daily relative strength index has been gradually falling in the neutral zone. The moving average convergence and divergence has indicated a sell and is declining in line with the stock price.

We are bearish on the stock from a short-term horizon. We anticipate the counter to decline further until it hits our price target of Rs 106 in the approaching trading sessions. Traders with short-term perspective can sell the stock while maintaining a stop-loss at Rs 125.