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Amara Raja Batteries (Rs 167.95): Sell

We recommend a sell in Amara Raja Batteries from a short-term perspective. From the charts of the Amara Raja Batteries we see that the stock has been on a medium-term downtrend from its February 2008 high of Rs 274. In early June, the stock conclusively crossed below the 200-day moving average and continued to decline. However, the stock found support at around Rs 143 and witnessed a corrective up-move to the resistance level Rs 180. After testing this resistance level the stock resumed the medium-term downtrend recently.

The stock is currently trading well below the 50- and 200-day moving averages. The daily momentum indicator has entered into the bearish zone. The daily moving average convergence and divergence is also featuring in the negative territory. Considering that the medium-term down trendline is intact, we are bearish on the stock in the short-term. We expect the stock’s decline to continue until it hits our price target of Rs 150 in the forthcoming trading sessions.

Traders with short-term perspective can sell the stock while maintaining a stop-loss at Rs 176.

Yoganand D.

BL Research Bureau

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