We recommend a sell in Praj Industries from a short-term perspective. The stock had been on a medium-term uptrend from its March 2008 low of Rs 100 to its late May high of Rs 222. Triggered by negative divergence in the daily Relative Strength Index, the stock reversed direction. On May 26, the stock tumbled more then 6 per cent, penetrating the medium-term up trendline. Subsequently, the stock declined breaching the 200-day moving average, which was providing minor suppor t to the stock, strengthening the bearish outlook. The daily RSI oscillator is currently declining in the neutral region and the weekly RSI has reversed from 60 level, indicating a weak short as well as medium-term outlook. The moving average convergence and divergence oscillator is also indicating a sell. Our short-term outlook for the stock is bearish. We expect the stock to trend downwards until it hits our price target of Rs 165 in the short-term. Traders with short-term perspective can sell the stock while keeping the stop loss at Rs 194.

BL Research Bureau

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