HCL Technologies

We recommend a sell in HCL Technologies from a short-term perspective. It is apparent from the charts of the stock that after recording a multi-year low of Rs 89 in early-March, it has been on an intermediate-term uptrend. However, the stock encountered significant long-term resistance at Rs 350 in late September and reversed its direction.

The stock’s reversal was triggered by factors such as negative divergence displayed in its daily relative strength index (RSI) as well as moving the average convergence and divergence (MACD) indicator and long-term resistance. Besides, both weekly RSI and MACD were hovering in the overbought territory.

Since then, the stock has been on a short-term downtrend. On October 6, it fell 5 per cent, penetrating the medium-term up trendline that has been in place from a July low of Rs 163. The daily RSI is slipping in the neutral region towards the bearish zone. The daily MACD has signalled a sell. Our short-term forecast on the stock is bearish. We anticipate it to decline until it hits our price target of Rs 280 in the approaching sessions. Traders with a short-term perspective can sell the stock while maintaining a stop-loss at Rs 324.

via BL