Traders with a short-term perspective can consider selling the stock of Oriental Bank of Commerce at current levels. The stock tumbled 3.7 per cent with above average volume on Thursday, following a narrow sideways movement at the base level of ₹170. Since encountering key resistance at ₹235 in late December 2013 and early January, the stock has been on a short-term downtrend.
The reversal was backed by a negative divergence on the daily indicators. Moreover, the stock decisively breached its important support and uptrend line at ₹200 on January 24. It also conclusively closed below its 50- and 200-day moving averages at ₹200. The stock is hovering well below these averages indicating that the downtrend is strengthening. The relative strength index on the daily chart is featuring in the bearish zone. The weekly RSI has just entered the bearish zone from the neutral region implying downward momentum. Moreover, the stock appears to have resumed its long-term downtrend that has been in place from the January 2013 peak of ₹366. The short-term outlook is bearish for OBC. Sell the stock while maintaining a stop-loss at ₹166. Targets are ₹156 and ₹152.