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We recommend a sell in the stock of Syndicate Bank from a short-term perspective. It is seen from the charts of the stock that after encountering resistance at Rs 135 in late May and early June, the stock started to decline. This reversal has been backed by negative divergence in daily moving average convergence divergence indicator. Since then, the stock has been on a short-term downtrend. While trending down, the stock decisively breached its 21- and 50-day moving averages.
On Thursday, the stock tumbled almost 4 per cent with good volume, decisively breaching its 200-day moving average and key support at Rs 120 level. With this fall, the stock appears to have resumed its medium-term downtrend that has been in place from December peak of Rs 145. The daily relative strength index is featuring in the bearish zone and weekly RSI is sloping down in neutral region. The daily MACD has signalled a sell and is charting downwards in line with the stock price.
Our short-term outlook on the stock is bearish. We expect its downtrend to continue and reach our price target of Rs 111.5 or Rs 109 in the upcoming trading sessions. Traders with short-term perspective can sell the stock with stop-loss at Rs 118.8 level.
( Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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