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We recommend a sell in the stock of Satyam Computer Services from a short-term perspective. It is evident from the charts of the stock that since peaking out from its 52-week high of Rs 131 registered in mid-March, it has been on a medium-term downtrend. The stock’s reversal was triggered by negative divergence in daily and weekly moving average convergence divergence indicators. The stock encountered resistance at around Rs 115 in early and late May and continued its downtrend.
Short-term trend is also down for the stock. Recently, the stock breached its 200-day moving average and is hovering well below it. On Wednesday, the stock decisively breached its key immediate support at Rs 105 by declining 3 per cent. For the week, the stock has tumbled 6.5 per cent.
We are bearish on the stock from a short-term perspective. We expect its decline to continue and reach our price target of Rs 99 or Rs 97 in the approaching trading sessions. Traders with short-term horizon can consider selling the stock with stop-loss at Rs 105.2 level.
( Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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