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We recommend a sell in the stock of Adani Ports and Special Economic Zone from a short-term perspective. It is seen from the charts of the stock that following an up move from its 52-week low at Rs 105 marked in late August 2012; the stock encountered key long-term resistance at around Rs 155 in early February this year. The stock peaked out registering a 52-week high at Rs 162 on February 6 and has been on a medium-term downtrend since then.
On Thursday, the stock plunged 4.8 per cent accompanied by extraordinary volume, conclusively breaking through an important support at Rs 130 as well as its 200-day moving average. It is hovering well below its 21- and 50-day moving averages. Both daily and weekly price rate of change indicators are featuring in the negative terrain indicating selling interest.
Our short-term outlook on the stock is bearish. We expect its downtrend to continue and reach our price target of Rs 121 or Rs 118 in the ensuing trading sessions. Traders with short-term perspective can consider selling the stock with stop-loss at Rs 128.5 level.
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