Union Bank of India

We recommend a sell in the stock of Union Bank of India from a short-term perspective. It is apparent from the charts of the stock that it had been on an intermediate-term uptrend from its March low of Rs 115 to an all-time high of Rs 291 recorded in November. However, the stock began to lose its bullish momentum and changed its trend, triggered by negative divergence displayed in the weekly relative strength index and moving average convergence and divergence. Since then the stock has been on a short-term downtrend. On December 15, it conclusively penetrated the intermediate-term uptrend-line as well as 50-day moving average by declining 3 per cent. The daily momentum indicators are on the verge of entering the bearish territory and the weekly momentum indicators are showing negative divergence. Considering the penetration of the uptrend-line, we are bearish on the stock from a short-term horizon. We expect it to decline until it hits our price target of Rs 230. Traders with short-term perspective can sell the stock while maintaining a stop-loss at Rs 272.

via BL