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We recommend a sell in the stock of Syndicate Bank from a short-term perspective. It is seen from the charts of the stock that it has been on an intermediate-term downtrend since its November 2010 peak of Rs 164. In April this year, after encountering resistance around Rs 130, a key resistance level and 50 per cent fibonacci retracement level, the stock began to decline. It appears to have resumed its intermediate-term downtrend.
On Wednesday, the stock tumbled four per cent accompanied by above average volume breaching its 50- and 21-day moving averages. Moreover, it is trading well below its 200- and 50-day moving averages. The 14-day relative strength index reversed lower from 60 levels and is declining in the neutral region towards the bearish zone. Weekly RSI is also slipping in the neutral region towards the bearish zone.
Considering that the stock's intermediate-term downtrend line is in tact, we are bearish on the stock from a short-term perspective. We expect it's down move to prolong until it reaches our price target of Rs 110.5 or Rs 107 in the ensuing trading sessions . Short-term traders can sell the stock with stop-loss at Rs 117.5 levels.
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