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We recommend a sell in CESC from a short-term trading perspective. It is apparent from the charts of CESC that it had been on an intermediate-term up-trend between the early March low and early June peak, from Rs 180 to Rs 376. However, the stock changed its trend after the negative divergence displayed in the daily relative strength index (RSI) and after encountering significant resistance around Rs 375. Since then, the stock has been on a short-term down-trend. While trending down, it breached 21-day moving average and the intermediate-term up-trendline recently. The daily RSI has entered in to the bearish zone and the weekly RSI is declining in the neutral region. After signalling a sell, the daily moving average convergence and divergence indicator are declining and are on the verge of entering the negative territory. Our short-term prediction for the stock is bearish. We anticipate the stock’s short-term down-trend to continue until it hits our price target of Rs 262. Traders with short-term perspective can sell the stock while maintaining a stop-loss at Rs 309.

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