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Today’s Pick: Ashok Leyland (Rs. 40.70)


We recommend a sell in Ashok Leyland from a short-term perspective. The stock has been confined to a sideways range between Rs 30 and Rs 50 since early 2006. But a sharp spike was witnessed since November 13, that has resulted in a 24 per cent price appreciation in just six sessions. Such sharp run-ups are unsustainable.

Negative divergence in the 14-week RSI denotes that the medium term outlook for the stock stays negative and selling pressure will be experienced at higher levels. The stock has also reversed from the near-term resistance at Rs 47. The stock can be sold in rallies with a stop at Rs 43. It is likely to return to the long-term base line at Rs 35 with an intervening halt around Rs 37.

Yoganand D.

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