We recommend a sell in the stock of Indian Hotels Company from a short-term perspective. It is apparent from the charts of the stock that it has been on an intermediate-term downtrend from its October 2012 peak of Rs 71.7. Both medium- and short-term trends are also down for the stock. In early May, the stock encountered key resistance at Rs 59 and resumed its medium-term downtrend. The stock has breached its 21- and 50-day moving average in recent times and hovering well below its 200-day moving average.
The daily moving average convergence divergence indicator is moving downwards in line with the stock price and is likely to enter the negative territory indicating downward momentum. The daily as well as weekly price rate of change indicators are featuring in the negative area implying selling interest.
Our short-term outlook on the stock is bearish. We expect the stock’s decline to continue and reach our price target of Rs 52.5 or Rs 51 in the forthcoming trading sessions. Traders with a short-term perspective can sell the stock with stop-loss at Rs 56.2 level.
( Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)