Investors with medium-term perspective can consider selling the stock of Sasken Communication Technologies (Rs 182), a telecommunications software provider. The stock is on an intermediate-term uptrend, after bottoming around Rs 41 in March 2009. This uptrend took the stock to the peak of Rs 225, yielding multi-fold returns to investors. Thereafter the stock started consolidating sideways in the broad range between Rs 185 and Rs 225. The key resistance pegged at Rs 225 that is the upper boundary of this range, arrested the stock from moving higher in late October. Since then, the stock has been on a short-term downtrend. Moreover, we notice a major top reversal candlestick pattern, bearish evening doji star pattern in the weekly chart. The stock fell 8.6 per cent in the last week of October confirming this candlestick pattern. While declining, the stock breached its 50 and 200-day moving averages and is trading below these averages. Besides, on November 12, the stock plunged almost 3 per cent breaking through a bearish pennant pattern, a continuation pattern. The daily relative strength index has entered in the bearish zone and weekly RSI is on the verge of entered this zone. Daily MACD is featuring in the negative territory and weekly oscillator is on the brink of entering in to negative territory implying downward momentum. Our medium-term forecast on the stock is bearish.

We believe that the stock has the potential to decline to our price target of Rs 150 following a minor pause around Rs 165, in the approaching weeks. Investors with medium-term perspective can consider selling the stock with stop-loss at Rs 201. Short-term traders can sell the stock while maintaining stop-loss at Rs 192 and target of Rs 165.

Follow up — Geometric (Rs 76.5)

Last week the stock moved higher in line with our anticipation and achieved our price targets of Rs 80 and then Rs 85 on Thursday.

Yoganand D.

BL Research Bureau

(This recommendation is based on technical analysis. There is a risk of loss in trading.)