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Analysis: STER (SLT)

|Includes:Vedanta Ltd (VEDL)

Today's pick is STER (SLT). After an initial uptrend in Feb this year, the stock deflated through June and settled in a range-bound side-ways motion ever since its merger with SESAGOA was approved. However, it just saw a very iffy breakout of the resistance level (Rs. 115) in the last trading session. In the last three months, the stock moved 14% against 13% rise of Nifty's.

Oscillators RSI and CMO are at currently at 68 and 55 - in over-bought territory.

The MACD line is showing a sign of pull back accompanied with the stagnation of the histogram levels, a sign of imminent bearish move for the scrip.

A long-term prediction cannot be made given that the long-term (red) GMMA lines are moving very close to each other. However, the short-term lines (blue) are experiencing a pullback, suggesting a short-term bearish move.

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STER's average correlation of 0.72 with the Nifty is positive and quite strong. The stock will be replicating the movements of Nifty pretty closely.

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STER has a historical volatility in the range of 0.3 to 0.8. The scrip's volatility is currently in the middle of the range, and is not a cause of concern for the traders.

Looking at these technicals the stock is short-term SELL. Over the longer-term, we suggest a HOLD for now, with a keen eye trained towards the Rs. 115 resistance level.

This article first appeared on Your Money@StockViz

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Stocks: VEDL