The Punjab Tractors scrip had shown a smart rally in the first quarter of the current year. The stock had risen from Rs 483 in mid-February to Rs 964 during the last week of April. Since then, performance of the stock has not been impressive. Attempts to cross the April-level have failed and the scrip has now fallen to Rs 766.The stock has broken the short-term trendline which is a weak signal. Besides dipping below the trendline, the moving averages have also entered into negative phase.
As far as the position of weekly oscillators is concerened, the RSI as well as MACD has been hinting at a correction. While the 10-week RSI has formed a negative divergence, the position of long-term MACD is equally bearish.
Overall, if one were to go by the current position of price chart and the oscillators, the stock is set for a big correction. An exit at the current level makes sense. Re-entry can be considered later.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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