After falling from a high of 150 (Touched in early March 2017), NMDC has been continuously making lower tops and lower bottoms.
This week, the stock also broke the recent lows of 132 on the back of healthy volumes, which indicates that selling was intense and the stock looks set to continue the next leg of its downtrend.
Technical indicators are currently giving negative signals as the stock trades below the short term (13 day SMA) and medium term (50 day SMA) moving averages. Momentum indicators like the 14-week RSI are in decline mode and at 50.6 are not yet in oversold territory. The 14-week RSI also trades below its 9 week EMA, which is a negative signal.
We believe the stock has the potential to move lower in the coming weeks as it attempts to test its previous intermediate lows of 120. We therefore recommend a Sell at CMP and selling more on any rises. Our entry levels, along with stop loss and targets have been mentioned above.
Recommendation: HDFC Securities recommends investors to buy NMDC India between Rs129 and Rs134 for a targets of Rs120 with a stop loss placed at Rs138 in 1-3 weeks.
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