Prism Cement

We recommend a ‘sell’ in Prism Cement from a short-term perspective. It was apparent from the charts of Prism Cement that the scrip, after bottoming in October 2008 to a low of Rs 13.50; was on a strong uptrend. However, the stock encountered resistance in mid-August at Rs 60. After encountering resistance for the second time in early September, the stock changed direction. This trend reversal was triggered by negative divergence displayed in the daily moving average convergence and divergence. The stock has been on a short-term downtrend since then. While trending down, the stock penetrated its medium-term uptrend line and its 21-day moving average recently. The daily RSI is declining in the neutral region and weekly RSI began to fall from the overbought levels. The daily MACD has indicated a sell. We are bearish on the stock from a short-term perspective. We expect the stock’s decline to prolong until it hits our price target of Rs 47.5 in the upcoming sessions. Traders with a short-term perspective can sell the stock while maintaining a stop-loss at Rs 56

via BL