Crompton Greaves

We recommend a sell in Crompton Greaves from a short-term perspective. It is evident from the charts of Crompton Greaves that after bottoming in late March at Rs 99, it was on an intermediate-term up trend till July peak of Rs 320. However, the stock reversed direction encountering key resistance in the range of Rs 300 to Rs 320 and was on short-term down trend since then. A prolonged negative divergence in the weekly relative strength index also backs this trend reversal. The stock breached its 21 and 50-day moving averages as well as intermediate-term up trendline on August 6. The daily momentum indicators are on the verge of entering into negative territory. Considering that the penetration of up trendline and the presence of negative divergence, we are bearish on the stock from a short-term horizon. We anticipate the stock to decline further until it hits our price target of Rs 250 in the upcoming sessions. Traders with a short-term perspective can sell the stock while maintaining a stop-loss at Rs 288.

via BL