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We recommend a sell in Castrol India from a short-term perspective. It is apparent from the charts that the medium-term uptrend of the stock, which began in early July from the support level of Rs 235 had encountered resistance at Rs 355 during early September. However, the stock reversed direction from this resistance level, triggered by negative divergence in the daily relative strength index (RSI) as well as daily moving average convergence and divergence (MACD).The stock declined sharply on Wednesday penetrating its medium-term up trendline. We also notice a bearish engulfing candlestick pattern, a bearish reversal pattern. The daily RSI has entered into the neutral region from the bullish zone. The daily MACD is signalling sell, reinforcing our bearish view. Considering the above bearish arguments, we are negative on the stock from a short-term perspective. We expect the stock’s decline to continue further until it hits our price target of Rs 300 in the approaching trading sessions. Traders with short-term perspective can sell the stock while maintaining a stop-loss at Rs 346.

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