JSW Steel

We recommend a sell in the stock of JSW Steel from a short-term horizon. It is evident from the charts that the stock’s intermediate-term rally from March low of Rs 161 had ended in late October high of Rs 935. Triggered by the negative divergence displayed in the daily relative strength index, the stock changed its trend. It has been on a short-term downtrend since October high. While declining, the stock breached it 21-day and 50-day moving average as well as intermediate-term uptrend-line. On November 3, the stock plummeted 10 per cent breaking through its significant long-term support level of Rs 700. The daily RSI is featuring in the bearish zone and weekly RSI is falling in the neutral region towards this zone. Moreover, the daily moving average convergence and divergence indicator has entered the negative territory. Our short-term outlook on the stock is bearish. We anticipate it to tumble until it hits our price target of Rs 610. Traders with a short-term perspective can sell the stock while maintaining a stop-loss at Rs 715.

via BL