Today’s pick is MTNL [stockquote]MTNL[/stockquote]. The stock started saw a triple-top at the beginning of the year at Rs 35, and then moved down to find support around Rs. 22. After hovering around for a couple of weeks it started its up-move to see 52 week’s high of Rs 45 around September. Since then the stock has been on a slide, waiting to find any support. In the last three months, the stock has moved -13% vs. +4% of the Nifty’s.
Oscillator RSI and CMO are closing in towards the over-sold territory. The stock is trading close to the lower end of Bollinger band giving an upward bias.
The MACD line and the signal line are moving parallel to each other and suggest the short –term downtrend to continue. Also, Long-term GMMA lines are starting to converge given the range-bound movement of the stock.
MTNL’s average correlation with the Nifty is 0.57 which is positive and strong. The scrip will be replicating movement of Nifty closely. [stockquote]NIFTYBEES[/stockquote]
MTNL has a historical volatility in the range of 0.4 to 1.2. The scrip’s volatility is currently in the lower end of the range.
Analysts continue to be bearish about the stock, and are distributed amongst underperform and sell calls.
Given these technicals and analysts call, we suggest a short-term sell. For the long-term, we could take a call based on the behavior of GMMA lines.
Read experts advice on the sector here.
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