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We recommend a sell in Neyveli Lignite Corporation from a short-term perspective. From the charts of Neyveli Lignite Corporation we note that it was on a medium-term sideways consolidation in a broad range between Rs 105 and 160 (from February to June).

On July 1, the stock broke down from this sideways consolidation by falling 8 per cent, accompanied by above-average volume.

With this recent fall, the daily relative strength index (RSI) of the stock has re-entered into the bearish zone and the weekly RSI has also entered into this zone. The moving-average convergence and divergence (MACD) is featuring in the negative territory that is below the zero line.

The stock is trading well below its 21- and 50-day moving averages. We are bearish on the stock in the short-term. We anticipate the stock to decline until it hits our price target of Rs 87 in the forthcoming trading sessions. Traders with short-term perspective can sell the stock while maintaining stop-loss at Rs 103.

BL Research Bureau

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