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We recommend a sell in the stock of MphasiS from short-term perspective. It is seen from the charts of the stock that it has been on a medium-term downtrend since encountering resistance around Rs 700 in mid-January. The stock's downtrend accelerated in late February and the stock emphatically broke through its key long-term support at Rs 550 levels. However, following a corrective up move from March low, the stock encountered resistance in the band between Rs 470 and 480 in late April and began to decline.
On Wednesday, the stock tumbled five per cent, breaching its 21- and 50-day moving average decisively. Both daily and weekly moving average convergence divergence indicators are hovering in the negative territory indicating downward momentum. Daily price rate of change has entered into the negative territory signalling selling interest. We are bearish on the stock from a short-term perspective. We expect it to decline further until it reaches our price target of Rs 431 or Rs 418 in the upcoming trading sessions. Traders with short-term perspective can sell the stock with stop-loss at Rs 459 levels.
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