We recommend a sell in the stock of Jindal Steel & Power from a short-term horizon. It is seen from the charts of the stock that after encountering long-term resistance in the range between Rs 460 and Rs 470 in December 2012, it started to decline. Since then, the stock has been in a short-term downtrend.
On Tuesday, the stock declined 3 per cent accompanied by above average volume, decisively breaching its immediate key support at Rs 413 and also its moving average compression (21, 50 and 200-day moving averages) at around Rs 420. With this downtrend, the stock appears to have resumed its long-term downtrend that has been in place from its February 2012 peak of Rs 663. The daily relative strength index is featuring in the bearish zone and weekly RSI is sloping down in the neural region.
The daily moving average convergence divergence indicator declining in line with the stock price and is featuring in the negative territory implying downward momentum. The daily price rate of change indicator is hovering in the negative terrain indicating selling interest. Considering that the stock's short-term down trendline is intact and breach of key support we are bearish on the stock from a short-term perspective.
We expect its fall to continue and knock our price target of Rs 380 or Rs 374 in the approaching trading sessions. Traders with short-term perspective can consider selling the stock with stop-loss at Rs 398 levels.