Traders with a short-term perspective can consider selling the stock of Union Bank of India at current levels. The stock’s medium-term uptrend that began in March from its key support around ₹100, came to a halt at ₹160 in late April. Encountering a significant long-term resistance in the band between ₹150 and ₹160, the stock reversed direction triggered by negative divergence.
The stock fell by 3.7 per cent on Wednesday, breaching its 21-day moving average as well as its medium-term trend line, thus strengthening its near-term bearish outlook. Both daily and weekly relative strength indices have entered the neutral region from the bullish zone implying that the uptrend is losing steam. There has also been a decline in daily volumes in recent times. The stock is well positioned for a short-selling opportunity with a price target of ₹142 and then ₹139 in the short-term. Stop-loss can be placed at ₹151.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)