Adani Enterprises

We recommend a sell in Adani Enterprises from a short-term perspective. It is evident from the charts of the stock that after taking support at Rs 238 in March it had been on an intermediate-term uptrend till it encountered resistance at Rs 850 in late July. The stock has significant resistance in the range between Rs 850 and Rs 870. Triggered by negative divergence displayed in the weekly relative strength index and daily moving average convergence and divergence indicator, the stock reversed direction. The stock has been on medium-term down trend since late July. Moreover, we notice formation of a complex head and shoulders (double left and right shoulders with one head) spanning over the past three months with neckline around Rs 670. On September 10, the stock conclusively breached this neckline by declining three per cent with above average volume. Our short-term outlook in the stock is bearish. We expect its decline to prolong until it hits our price target of Rs 575 in the forthcoming sessions. Traders with a short-term perspective can sell the stock while maintaining a stop-loss at Rs 671.

via BL