OBC

We recommend a sell in Oriental Bank of Commerce from a short-term trading perspective. After bottoming in March at Rs 94, the stock was on a medium-term uptrend till the late May high of Rs 202. However, the stock changed trend triggered by the negative divergence shown in daily relative strength index and presence of significant resistance at Rs 190. Since then, the stock has been on an intermediate-term downtrend. This week, the stock declined 14 per cent decisively breaking through the support level at Rs 170 as well as the medium-term up-trendline. The stock is trading well below its 21- and 50-day moving averages. The daily RSI has entered the bearish zone and weekly RSI is declining in the neutral region. In line with RSI, moving average convergence and divergence (MACD) indicator too entered the negative territory. We are bearish on the stock from a short-term perspective. We expect it’s decline to prolong until it hits our price target of Rs140. Traders with a short-term perspective can sell the stock while maintaining a stop-loss at Rs 165.

via Business Line