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We recommend a sell in the stock of Berger Paints India from a short-term perspective. It is evident from the charts of the stock that after encountering key resistance at Rs 250 in May, June and July this year, the stock started to decline triggered by negative divergence in weekly relative strength index and daily moving average convergence divergence indicator. Since then, the stock has been on a medium-term downtrend, forming lower peaks and troughs. It is trading well below its 21- and 50-day moving averages. Short-term trend is also down.
On Tuesday, the stock fell 2.7 per cent with above average volume, breaching its important support and intermediate-term uptrend line at around Rs 200. The daily RSI is featuring in the bearish zone and weekly RSI is declining in the neutral region towards the bearish zone. We are bearish on the stock from a short-term perspective. We expect its downtrend to continue and reach our price target of Rs 188 or Rs 184 in the forthcoming trading sessions. Traders with short-term perspective can sell the stock with stop-loss at Rs 200 level.
( Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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