Investors with a short-term perspective can sell the stock of Punjab National Bank at current levels. After testing a key resistance at ₹170, the stock plunged almost 4 per cent on Thursday. This fall has breached the stock’s 21-day moving average line. Moreover, the stock appears to have resumed its medium-term downtrend that has been in place from the December 2014 peak of ₹231. The short-term trend is also down. The stock trades well below its 50- and 200-day moving averages.
The relative strength index on the daily chart has entered the bearish zone from the neutral region. Both the daily and weekly moving average convergence divergence indicators are hovering in the negative territory. The short-term outlook is bearish for the stock. It can extend its downtrend and hit our price target of ₹155.5 and ₹152 in the ensuing trading sessions. Sell the stock while maintaining a stop-loss at ₹165.5.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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