We recommend a sell in the stock of Jaiprakash Associates from a short-term perspective. It is evident from the charts of the stock that it has been trending down in all-time frames long, medium and short-term. After encountering resistance at Rs 140 in November 2010, the stock resumed its downtrend and emphatically breached its long-term support at Rs 110. Subsequently, the stock's downtrend accelerated in January, declining below Rs 100.

The stock failed to move above its short-term resistance at Rs 90 last week and started to decline. The stock tumbled 6 per cent accompanied with above average volume breaching its 21-day moving average on February 24. It is trading well below its 50 and 200-day moving averages. The daily relative strength index has entered in the bearish zone and weekly RSI is featuring in this zone. Both daily and weekly moving average convergence divergence indicators are hovering in the negative territory signalling downward momentum. We are bearish on the stock from a short-term perspective. We anticipate the stock to decline further until it hits our price target of Rs 76 or Rs 74 in the forthcoming days. Traders with short-term perspective can consider selling the stock with stop-loss at Rs 81.

Related Topics