Today’s pick is INDIAINFO [stockquote]INDIAINFO[/stockquote]. The stock started the year with a rush towards Rs. 80 levels, after finding resistance around the levels, it started its descent to find support around Rs. 45 levels in May. Since then, the stock had been on an uptrend reaching its 52 week’s high of Rs. 92 in the month of December. However post December it is in a correction mode. In the last three months, the stock moved -27% vs. -2% of Nifty’s.

INDIAINFO technical analysis chart

Oscillator RSI and CMO are closing in towards the over-sold territory. The stock is currently trading in the lower range of the Bollinger bands. Short-term technical saw a 9X4 bearish cross-over a few days ago.

The MACD line has bearishly penetrated the signal line and the drop in the histogram level suggests a short-term bearish move. Also, the Long-term and short-term GMMA lines are inverted in a bearish move.

INDIAINFO Correlation chart

INDIAINFO’s average correlation with the Nifty is 0.65, which is positive and strong. The scrip will be closely replicating movement of Nifty. [stockquote]NIFTYBEES[/stockquote]

INDIAINFO volatility chart

INDIAINFO has a historical volatility in the narrow range of 0.6 to 1.4. The scrip’s volatility is currently in the lower end of the range.

Given the technicals, we suggest a short-term sell. A long-term call could be taken depending on the directional move of the GMMA lines.

For a better picture of the NBFC sector as a whole, you can look at what the experts have to say here and here.

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