Today’s pick is SHOPERSTOP [stockquote]SHOPERSTOP[/stockquote]. The stock initially rushed to Rs. 400 points, but after facing resistance there it dropped to the Rs. 300 levels. After a couple of weeks support on this level, the stock started its up-move in June to see its 52 week’s high of Rs. 495 in December. Since then the stock has been on a downtrend. In the last three months, the stock moved -16% vs. -4% of Nifty’s.

SHOPERSTOP Technical analysis chart

Oscillator RSI and CMO are reaching the over-sold territory. The stock is currently trading in the lower range of the Bollinger bands. Short-term technical saw a bearish Gravestone Doji.

The MACD line and signal line are very close to each other and are not suggesting any direction. But the inversion in the histogram levels is giving early sign of an upcoming bullish move. Also, the Long-term and short-term GMMA lines are too close to give out any directional bias.

SHOPERSTOP correlation chart

SHOPERSTOP’s average correlation with the Nifty is 0.44, which is positive. The scrip will be closely replicating movement of Nifty. [stockquote]NIFTYBEES[/stockquote]

SHOPERSTOP volatility chart

SHOPERSTOP has a historical volatility in the narrow range of 0.5 to 1.1. The scrip’s volatility is currently in the lower end of the range.

Given the technicals, we suggest a short-term buy. A long-term call could be taken depending on the directional move of the GMMA lines and price action near the support levels of Rs. 360. Also, it is advisable to have a relaxed trailing stop-losses level to book profits in case of a trend-reversal.

For a better picture of the Retail sector as a whole, you can look at what the expert has to say here.

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