Today's Pick

Housing Development & Infrastructure Ltd (Rs 156.9): Sell

Updated on: Mar 15, 2011
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We recommend a sell in the stock of Housing Development and Infrastructure Ltd from a short-term perspective. It is evident from the charts that the stock has been on a long-term downtrend from its October peak of Rs 410, forming lower peaks and lower troughs. Intermediate-term trend is also down for the stock. However, following a short-term corrective rally backed by declining volumes, the stock encountered a significant long-term resistance around Rs 167 in first week of March. The stock struggled for two weeks to penetrate this resistance. 

On March 15, the stock tumbled 5.5 per cent accompanied by good volume breaching its short-term uptrend-line. This decline has reinforced its downtrend. Moreover, negative divergence in the daily stochastic oscillator supports this reversal. The daily relative strength index is declining in the neutral region towards the bearish zone whereas the weekly RSI is hovering in the bearish zone. Considering the significance of the stock's long-term resistance and that its downtrend is still in place, we are bearish on the stock from a short-term perspective. We anticipate the stock's decline to prolong until it hits our price target of Rs 152 or Rs 147. Traders with short-term perspective can consider selling the stock with stop-loss at Rs 161.5.

Published on March 15, 2011

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