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We recommend a sell in the stock of UCO Bank from a short-term horizon. It is seen from the charts of the stock that it has been on an intermediate-term downtrend from its 52-week high of Rs 95 registered in February. Following a corrective up-move the stock encountered resistance at around Rs 83 in early July. Since then, the stock has been on a medium-term downtrend.
In late July, the stock breached its 200-day moving average around Rs 70 and is hovering well below it. Reinforcing the downtrend, the stock fell almost four per cent on Monday, accompanied by above average volumes, breaching a key support at Rs 65. The daily relative strength index is featuring in the bearish zone and weekly RSI has entered this zone from neutral region. Both daily and weekly price rate of change indicators are hovering in the bearish area, implying selling interest.
We are bearish on the stock from a short-term perspective. We expect downtrend to prolong till the stock reaches our price target of Rs 62 or Rs 59.5 in the ensuing trading sessions. Traders with a short-term perspective can consider selling the stock, while maintaining stop-loss at Rs 66.
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