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Abhishek Preetam has an MBA in Finance and started his career as a big-data specialist working at Janalakshmi Social Services. Abhishek is a firm believer in technical analysis and a systematic approach to investing. He develops algorithms and automated portfolio management systems that crunch... More
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  • Analysis: STER (SLT) 0 comments
    Feb 18, 2013 1:01 AM | about stocks: VEDL

    Today's pick is STER. The stock started the year with a rush to Rs. 140 levels, and after peaking off, it started its descent. The stock found a support around Rs 90 levels. Since then the stock has tested the support many times. Also, the stock seems to have found resistance around Rs. 120, which was tested twice in December, and stock again plummeted to the support levels. In the last three months, the stock has moved +3% vs. +5% of the Nifty's.

    (click to enlarge)

    Oscillator RSI and CMO are closing in towards the over-sold territory. The stock is trading in the lower end of a very compact Bollinger band giving no directional bias.

    The MACD line and signal line are moving parallel to each other, unable to give any outlook. Stagnating histogram levels do suggest forthcoming trend reversal. Also, Long-term and short-term GMMA lines are running close to each other and are not giving out any directional bias.

    (click to enlarge)

    STER's average correlation with the Nifty is +0.71 which is positive and strong. The scrip will be replicating movement of Nifty closely.

    (click to enlarge)

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

    Given these technicals, we suggest a short-term sell. For the long-term we suggest to take a call based upon its behavior around the support levels.

    The article first appeared on Your

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

    Stocks: VEDL
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