Essar Oil

We recommend a sell in Essar Oil from a short-term trading perspective. It is apparent from the charts of Essar Oil that after taking support at Rs 60 in early March, it bounced. The stock conclusively broke through the key resistance level of Rs 95 on April 6 and rallied sharply.

The stock was on a medium-term uptrend till early April high of Rs 181. However, it began to decline after encountering significant resistance around Rs 180. The daily relative strength index (RSI) has reversed lower from overbought territory. Moreover, it is displaying a negative divergence.

On April 27, the stock tumbled 10 per cent, reinforcing the short-term down trend that is in place since early April. We are bearish on the stock from a short-term perspective. We expect its decline to prolong until it hits our price target of Rs 135 in the upcoming trading sessions. Traders with short-term trading horizon can sell the counter while maintaining a stop-loss at Rs 157.

via BL