SAIL

We recommend a sell in Steel Authority of India Ltd stock from a short-term trading perspective. It is clearly visible from the charts of SAIL that it was on an intermediate-term uptrend from its 52-week low of Rs 55 recorded in late November till it encountered resistance in the band between Rs 92 and Rs 97 in mid-February. The stock reversed direction at this resistance level, with the formation of a bearish engulfing candlestick pattern.

The stock has been on a short-term down trend from this resistance level. While declining, the stock conclusively breached its 21- and 50-day moving averages which are positioned at Rs 81. Moreover on February 24, the stock penetrated its intermediate-term down trend-line by tumbling 4 per cent, accompanied with above average volume. Both daily and weekly relative strength indices (RSI) are on the brink of entering the bearish zone from the neutral region.

The daily moving average convergence and divergence indicator is signalling a sell. We are bearish on this stock from a short-term perspective. We expect the stock’s decline to continue until it hits our price target of Rs 68 in the forthcoming trading sessions. Traders with short-term perspective can sell the stock while maintaining a stop-loss at Rs 80.