V-Guard Industries

We recommend a sell in the stock of c from a short-term perspective. It is apparent from the charts of the stock that it has been on a long-term uptrend from its March 2009 trough of Rs 38. The stock's uptrend got accelerated in late July 2010 and has been on a medium-term uptrend since then. However, after recording a life-time high of Rs 212 on September 15, the stock started to witness selling pressure and formed shooting star candlestick pattern.



This candlestick pattern is a bearish reversal pattern and implies reversal in the trend. The stock is trading well above the Bollinger's Band's upper boundary, signalling an overbought territory. Moreover, the daily relative strength index is displaying negative divergence, indicating trend reversal. Both weekly and monthly RSI are hovering in overbought territories.

The daily as well as weekly moving average convergence divergence oscillators are also featuring in the overbought levels. We take a contrarian view on the stock from a short-term horizon and expect it to decline until it hits our price target of Rs 195 or Rs 190 in the upcoming trading sessions.

Traders with short-term perspective can sell the stock while maintaining a stop-loss at Rs 210.

via BL