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We recommend a sell in JSW Steel from a short-term perspective. The stock has been on a medium-term uptrend from its April low of Rs 490 levels.

However, the stock encountered resistance at Rs 1,200 recently and began to decline forming a bearish engulfing candlestick pattern in the daily chart. This reversal has been supported by the negative divergence in the daily Relative Strength Index (RSI). The RSI has entered the neutral region from the bullish zone.

A crossover in the daily moving average convergence and divergence indicates a sell signal. The stock is currently testing the medium-term up trendline around Rs 1,085 level.

Considering the above factors, we are bearish on the stock in the short-term. We expect the stock to penetrate the uptrendline and decline until it hits our price target of Rs 980 in the approaching trading sessions. Traders with short-term perspective can sell the stock while keeping the stop-loss at Rs 1,138 level.

Yoganand D.

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