Today’s pick is SIEMENS [stockquote]SIEMENS[/stockquote]. The stock saw a double top at the beginning of the year, to start its descent to Rs. 650 levels. It then was range bound between Rs. 650 – Rs. 750 for June to January. In January it saw a bearish breakout of the range, and has since been headed south. In the last three months, the stock moved -22% vs. -2% of the Nifty’s.
Oscillator RSI and CMO are deep into over-sold territory. The stock is trading in the lower edge of a very broad Bollinger band.
The MACD line and signal line are moving parallel to each other without giving any directional bias. Also, Long-term and short-term GMMA lines are currently inverted and expanding giving a bearish bias for the stock.
SIEMENS’s average correlation with the Nifty is 0.58 which is positive and strong. The scrip will be replicating movement of Nifty. [stockquote]NIFTYBEES[/stockquote]
SIEMENS has a historical volatility in the range of 0.2 to 0.5. The scrip’s volatility is currently in the lower end of the range.
Given these technicals, we suggest a short-term Buy and a long-term Sell. However, as the scrip is deep in over-sold territory, I suspect that a move back is in waiting for the short-term.
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