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We recommend a sell in Great Eastern Shipping Company from a short-term perspective. From the charts of the stock, we note that it was on a medium-term uptrend from its March 2008 low of Rs 311, till it recorded a peak at Rs 537 in late May.

On June 4, the stock conclusively penetrated the medium-term up trendline as well as the 21-day moving average line. The stock continued to head Southward and penetrated the key support level Rs 450 by tumbling 6 per cent with above-average volume on June 10.

With this decline, the daily momentum indicator has entered the bearish zone form the neutral region. The moving-average convergence and divergence is in line with the stock and is likely to enter the negative territory. We are bearish on the stock in the short-term horizon.

We expect the stock’s decline to continue until it hits our price target of Rs 380 in the upcoming trading sessions. Traders with short-term perspective can sell the stock, while maintaining the stop-loss at Rs 452 level.

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