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Investors with a short-term perspective can consider selling the stock of Allahabad Bank at current levels. The stock has been on a short-term uptrend since taking support at ₹90 in early May. Nevertheless, it encountered a significant long-term resistance at ₹145 in the previous week and started to decline. This reversal has been backed by a negative divergence in the daily relative strength index. The daily price rate of change indicator has also displayed a negative divergence backing the trend reversal. Further, this indicator has entered the negative territory implying selling interest.
The daily moving average convergence divergence indicators have signalled a sell. On Wednesday, the stock fell 4 per cent with above average volume reinforcing the bearish momentum. The near-term outlook is bearish. The stock can extend its decline and reach the price target of ₹127.5 and ₹125 in the coming sessions. Sell with a stop-loss at ₹136.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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