Tata Elxsi

We recommend a sell in the stock of Tata Elxsi from a short-term perspective. It is evident from the charts of the stock that after encountering a significant long-term resistance in the zone between Rs 340 and Rs 350 in March 2010 itstarted to decline. Since then, the stock has been on a medium-term downtrend. Moreover, it met with twin resistance (down trendline and resistance level) around Rs 290 in early July and it had resumed its medium-term downtrend. On July 26, the stock tumbled 5 per cent, breaching its 21 and 50-day moving averages decisively. The volume traded was above average on that session. The daily relative strength index has entered in to the bearish zone from the neutral region and weekly RSI is slipping towards this zone in the neutral region. After signalling a sell, the daily moving average convergence divergence oscillator is entering in to the negative territory implying downward momentum. Considering that the stock's medium-term down trend-line is intact, our short-term forecast on the stock is bearish. We expect the stock to decline further until it hits our price target of Rs 250 or Rs 240 in the approaching trading sessions. Short-term traders can sell the stock while maintaining stop-loss at Rs 276.

via BL