We recommend a sell in the stock of Sesa Goa from a short-term perspective. It is apparent from the charts of the stock that it has been on a medium-term downtrend since encountering key long-term resistance at Rs 205 in early January. After testing resistance at Rs 167 in early March, the stock resumed its downtrend. It has been on a short-term downtrend since then. Moreover, long-term trend for the stock is down. It is trading well below its 50- and 200-day moving averages.
On Thursday, the stock fell more than 3 per cent with good volume breaching its significant long-term support at Rs 150. The daily relative strength index has entered the bearish zone from the neutral region and weekly RSI is featuring in the bearish zone. The daily moving average convergence divergence indicator has signalled a sell. The weekly MACD is slopping down in line with the stock's price implying bearish momentum. Both daily and weekly price rate of change indicators are hovering in the negative territory indicating selling interest.
Our short-term outlook on the stock is bearish. We expect its downtrend to prolong and reach our price target of Rs 141.5 or Rs 138.5 in the approaching trading sessions. Traders with short-term horizon can consider selling the stock with stop-loss at Rs 150.4 level.
( Note: This recommendation is based on technical analysis. There is a risk of loss in trading.)