Rolta India

We recommend a sell in the Rolta India stock for investors with short-term perspective. From the charts of Rolta, it is clearly evident that it has been trending downwards from its September high of Rs 360.

However, after finding support at Rs 134 (a 52-week low) in early October, the stock bounced up. This up move failed to move beyond Rs 200. Since then, the stock was on a sideways consolidation in the range of Rs 160 and Rs 195.

During late October the stock breached its 21-day moving average on the downside, signalling initial weakness. Subsequently, on December 2, the stock conclusively broke out of the sideways trading range by declining 5.5 per cent accompanied with above-average volumes. With this, the daily relative strength index (RSI) has entered in to the bearish zone and weekly RSI is already featuring in this zone.

Our short-term view on the stock is bearish. We expect the stock to decline until it hits our price target of Rs 140 in the forthcoming trading sessions. Traders with short-term perspective can sell the stock while maintaining a stop-loss at Rs 164.