We recommend a sell in the stock of Godrej Industries from a short-term horizon. It is evident from the charts of the stock that since peaking out in September 2010, it has been on a medium-term downtrend forming lower peaks and lower troughs. In early January 2011, the stock encountered resistance around Rs 200 and resumed its downtrend. While declining it breached its 21, 50 and 200-day moving averages and is currently hovering well below these averages.

The stock tumbled almost 4 per cent breaking through its key long-term support at Rs 167 on Tuesday. Moreover, the stock has breached its 38.2 per cent fibonacci retracement support level as well. This strengthens the current downtrend. Both the daily and weekly relative strength indices have entered in to the bearish zone from the neutral region. The daily moving average convergence divergence indicator is featuring in the negative territory and weekly MACD has just entered this territory implying downward momentum. Our short-term outlook on the stock is bearish. We expect this decline to prolong until it touches our price target of Rs 155 or Rs 151 in the upcoming trading sessions. Short-term traders can consider selling the stock with stop-loss at Rs 163.5.

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