Bajaj Hindusthan

We recommend a sell in the stock of Bajaj Hindusthan from a short-term perspective. It is apparent from the charts that after taking support at around Rs 40 in March 2009, the stock began to trend upwards. However, it encountered significant long-term resistance at around Rs 240 in October 2009 and started moving sideways. Though the stock re-tested this resistance level in early January, it failed to break through. Since then, it has been on a short-term downtrend. This downtrend got accelerated as the stock tumbled 6 per cent on January 19, penetrating the intermediate-term up trendline and 50-day moving average. The daily moving average convergence and divergence indicator has signalled a sell and is slipping towards negative territory. The daily relative strength index (RSI) is on the verge of entering into the bearish zone from the neutral region. We are bearish on the stock from a short-term perspective. We expect its decline to continue until it hits our price target of Rs 190. Traders with short-term perspective can consider selling the stock while maintaining stop-loss at Rs 222.