Tata Chemicals

We recommend a sell in Tata Chemicals stock from a short-term horizon. It is apparent from the charts of Tata Chemicals that it has been on a long-term downtrend since its life-time high of Rs 440 touched in May 2008.

In early January 2009, the stock resumed this downtrend, after encountering significant resistance at Rs 180 levels. Since then, the stock has been on a declining. It is trading well below the 21- and 50-day moving averages.

On February 24, the stock breached the support level at Rs 137 by declining 3 per cent. Both daily and weekly relative strength indices are featuring in the bearish zone. The daily moving average convergence and divergence indicator is steadily declining in the negative territory. Considering that the long-term down trendline is intact, we are bearish on the stock. We expect the stock’s decline to prolong until it hits our price target of Rs 116. Traders with short-term perspective can sell the stock while maintaining a stop-loss at Rs 137.