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We recommend a sell in Godrej Consumer Products from a short-term perspective. From the charts of the Godrej Consumer Products, we note that it has been on long-term downtrend since its April 2006 high of Rs 197.

However, the stock found support at around Rs 95 in mid January ’08 and has been on a medium-term uptrend. We note that the stock’s current uptrend had met with a long-term significant resistance at Rs 140 more recently and begun to declin e. The stock is likely to resume the long-term downtrend, supported by the negative divergence in the daily momentum indicator. The daily momentum is on the verge of entering the neutral region from the bullish zone. Considering the strength of the long-term downtrend and the significant resistance level, we expect the stock to decline to our target price level of Rs 117 in the short-term. Investors with a short-term perspective can sell the stock while keeping the stop loss at Rs 145.

Yoganand D

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