We recommend a sell in the stock of Jaiprakash Associates from a short-term perspective. It is apparent from the charts of the stock that following a medium-term uptrend from its august 2012 low of Rs 61, it encountered resistance at Rs 105 in mid December. Subsequently, the stock reversed direction triggered by negative divergence in daily relative strength index and moving average convergence divergence indicator. Since then, the stock has been in a short-term downtrend. While trending down, the stock breached its medium-term up trend-line and 21- day moving average, in early last week. On Friday, the stock decisively broke through a key support as well as 50-day moving average at Rs 95 by declining 4 per cent with above average volume. The daily relative strength index has entered the bearish zone from the neutral region and weekly RSI has entered the neutral region from the bullish zone. The daily MACD is declining in line with the stock price and is on the brink of entering the negative territory from the positive territory. Our short-term forecast for the stock is bearish. We expect its decline to continue and reach our price target of Rs 89.40 or Rs 87 in the forthcoming trading sessions. Traders with short-term perspective can consider selling the stock with stop-loss at Rs 95.

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