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We recommend a sell in the stock of Hindustan Oil Exploration Company from a short-term perspective. It is seen from the charts of the stock that it has been on a long-term downtrend from its life time peak of Rs 398 recorded in September 2009. Encountering resistance around Rs 290 in November 2010, the stock resumed its downtrend. Both medium and short-term trends are down for the stock. It is trading well below it 50 and 200-day moving averages.
On Wednesday, the stock dived 5 per cent. It has tumbled 12 per cent in the last three trading sessions, conclusively breaking through its key long-term support at Rs 170. Both daily and weekly relative strength indices are featuring in the bearish zone. Daily as well as weekly moving average convergence divergence indicators are hovering in the negative territory implying downward momentum.
Further, price rate of change indicator is hovering in the negative territory indicating selling interest. We are bearish on the stock from a short-term perspective. We anticipate it to decline further until it hits our price target of Rs 155 or Rs 151 in the forthcoming trading sessions. Short-term traders can consider selling the stock with stop-loss at Rs 165.5.
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