We recommend a sell on the stock of UCO Bank from a short-term perspective. It is evident from the charts of the stock that since marking its 52-week high at Rs 95 in February this year, the stock has been trending downwards forming lower peaks and troughs. Following a short-term up move, the stock encountered resistance at Rs 80 in early October. Thereafter, the stock started to decline triggered by negative divergence in daily relative strength index and price rate of change indicator.
On Tuesday, the stock conclusively breached its significant support level at Rs 75 and 200-day moving average by tumbling 4 per cent with above average volumes. The daily RSI is on the brink of entering the bearish zone from the neutral region and weekly RSI is sloping towards the bearish zone. The daily moving average convergence divergence indicator is declining in line with the stock price implying downward momentum.
We are bearish on the stock from a short-term perspective. We expect the stock's decline to continue and reach our price target of Rs 69 or Rs 67.5 in the forthcoming trading sessions. Traders with short-term perspective can consider selling the stock with stop-loss at Rs 73.5 levels.