We recommend a sell in the stock of Chambal Fertilisers and Chemicals from a short-term perspective. It is seen from the charts of the stock that since its November 2010 peak of Rs 104, the stock has been on an intermediate-term downtrend.

The stock encountered resistance in the range between Rs 88 and Rs 90 during early April and May this year and resumed its downtrend. Since then, it has been on a medium-term downtrend. On June 20, the stock fell more than 3 per cent, conclusively breaching its 200-day moving average.

It is hovering well below its 21-, 50- and 200-day moving averages. Further, the stock emphatically broke through its immediate key support at Rs 74 by tumbling 4 per cent with good volumes on Wednesday. This fall has reinforced its medium-term downtrend. Daily relative strength index is featuring in the bearish zone and weekly RSI is slipping in the neutral region towards the bearish zone. The daily moving average convergence divergence has signalled a sell and is hovering in the negative territory implying downward momentum.

Considering the stock's recent breakthrough of support and that its intermediate-term down trendline is intact, we are bearish on the stock in the short-term. We expect its decline to prolong until it hits our price target of Rs 70.5 or Rs 68.5 in the forthcoming trading sessions. Short-term perspective traders can consider selling the stock with stop-loss at Rs 74.5.

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