Analysis: SAIL

Today’s pick is SAIL [stockquote]SAIL[/stockquote]. The stock started the year with a nick of an uptrend to see the Rs. 115 levels but dropped on its chin due to lost momentum soon thereafter to see itself around Rs. 80 levels by September. After a couple of trials to move up, the stock finally broke the down-trend in place during late December and is currently trading at Rs. 90. In the last three months, the stock has moved +12% vs. +6% of the Nifty’s.

SAIL technical analysis chart

Oscillators RSI and CMO are in no man’s land unable to suggest any direction. The stock just saw a short-term 9×4 bearish cross-over.

The MACD line is moving towards the signal line, accompanied by the falling histogram levels such movement is suggesting an imminent bearish move for the stock. The long-term GMMA lines are well dispersed out, suggesting a bullish outlook for the scrip. However, the sudden decrease in the prices has led to a constrained movement of short-term GMMA lines giving a bearish signal.

SAIL Correlation chart

SAIL’s average correlation with the Nifty is 0.67 is positive and strong. The scrip will be closely replicating the movement of Nifty. [stockquote]NIFTYBEES[/stockquote]

SAIL volatility chart

SAIL has a historical volatility in the range of 0.3 to 0.7. The scrip’s volatility currently is in the middle of the range.

Given these technicals, we suggest a short-term Sell. Looking at the well dispersed GMMA lines we suggest a long-term Buy for the script with a keen eye around Rs. 100 levels for any resistance.

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