15 June 2015

Udaan - Sell Shriram Transport Finance Company Ltd:: Edelweiss

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The chart of SRTRANSFIN shows that it is in a downtrend. Prices broke below its 200 DMA in the month of April 2015 and has never looked back. The stock has fallen more than 20% since then.
Price made a new 52 week low last month and broke its crucial support placed at 840-855 range. Since last one month the stock has been trading below the above mentioned level. It has broken from a narrow consolidation range of 800-860 in today’s session confirming further weakness. The daily ADX indicator is currently placed above 40 mark whereas –DI indicator is now above 30 mark which indicates accelerated momentum in a downtrend.
The comparative chart of SRTRANSFIN versus Nifty shows clear underperformance of the stock as it has fallen more than 20% in last one year versus a 4% gain by the index.
Based on the above evidences on price chart, we expect prices to decline from current levels and move lower towards 680 / 665 levels in the short and medium term.
We recommend selling June Futures in the range of 775-810 for Target of 680 / 665.


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