Today's Pick

Great Eastern Shipping Company: Sell

Yoganand D | Updated on June 21, 2011

great.eps

We recommend a sell in the stock of Great Eastern Shipping Company from a short-term horizon. It is apparent from the charts of the stock that, following a medium-term corrective uptrend from its February low of Rs 242, the stock encountered resistance in the range between Rs 300 and Rs 305 in early June. For the stock, this band is a significant long-term resistance band; its failure to move above this signals weakness. The stock subsequently resumed its primary downtrend that had been in place since its November 2010 peak of Rs 393. On June 20, the stock tumbled 4 per cent emphatically breaking through its medium-term corrective up trendline and also its 21-and 50-day moving averages. The stock is trading well below these averages.

The 14-day relative strength index is featuring in the bearish zone and weekly RSI has just entered this zone from the neutral region. After signalling a sell, the daily moving average convergence divergence indicator has just entered the negative territory and the weekly MACD features in the negative territory indicating downward momentum. Both daily and weekly price rate of change indicators are hovering in the negative terrain implying selling interest. Our short-term outlook is bearish on the stock. We anticipate it to decline further until it touches our target of Rs 253.5 or Rs 245.5 in the approaching trading session. Traders can sell the stock with stop-loss at Rs 269.5 levels.

Published on June 21, 2011

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