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We recommend a sell in Bajaj Hindusthan from a short-term perspective. It is clearly evident from the charts that it has been on a long-term down trend from its January 2008 high of Rs 399.

Since then the stock has been forming lower peaks and lower troughs, maintaining the down trend. The stock however, found support at around Rs 40 (long-term support level) in early December 2008 and witnessed a corrective up move to Rs 76. Triggered b y the negative divergence displayed in the daily relative strength index (RSI), the stock resumed its long-term downtrend recently.

Moreover, the stock formed a bearish engulfing candlestick pattern on January 7 by tumbling 10 per cent. The daily RSI has entered in to the neutral region from the bullish zone and the weekly RSI is featuring in the bearish zone.

We are bearish on the stock from a short-term horizon. We anticipate the stock’s decline to prolong until it hits our price target of Rs 58 in the approaching trading sessions.

Traders with short-term perspective can sell the stock while maintaining a stop-loss at Rs 70.

Yoganand D.

BL Research Bureau

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