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We recommend a sell in EIH from a short-term perspective. From charts of the EIH, we note that the stock has been on a downtrend (forming lower peaks and lower troughs) form its 52-week high of Rs 246 (touched on January 7).

However, in late March the stock found support at around Rs 119 levels and witnessed a corrective up move to Rs 160 level.

The stock met with a resistance (down trendline) around Rs 160 levels during late April and it failed to surpass this resistance due to selling pressure. Subsequently the stock began to decline and it appears to have resumed its downtrend.

On May 9, the stock fell penetrating the 50- and 200-day moving averages, indicating further bearishness. The daily momentum indicator is on the verge of entering the bearish zone.

A cross over in the daily moving average convergence and divergence indicates a sell signal. We are bearish on the stock in the short-term.

We expect the stock’s downtrend to continue until it hits our price target of Rs 124 in the upcoming trading sessions. Investor with short-term perspective can sell the stock while keeping the stop-loss at Rs 149.

Yoganand D.

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