Eastern International Hotels (Oberoi Group) prices movements are an interesting study in diverging trends. I like to study weekly charts since they are better indicative of medium term trends and give a clearer picture of the strength or weakness of a scrip.
1 and 2, the price and the oscillator move in opposite direction, further the A/D trend (5) also is downward. This confirms the weakness of the upward movement. Similarly 3 and 4 the price stays flat and Stochastic trends upward. When you encounter a divergence in two indicators then this implies to tread with caution.
In the last week the price has dipped below the 200 EMA and this is confirmed by both the stochastic and A/D. Moreover the relative strength vs. Nifty which has been flat, has seen a downward curvature. This is a good opportunity to go short on the stock with stop loss at 100, the stock is likely to move to the early 80's next couple of weeks.
1 and 2, the price and the oscillator move in opposite direction, further the A/D trend (5) also is downward. This confirms the weakness of the upward movement. Similarly 3 and 4 the price stays flat and Stochastic trends upward. When you encounter a divergence in two indicators then this implies to tread with caution.
In the last week the price has dipped below the 200 EMA and this is confirmed by both the stochastic and A/D. Moreover the relative strength vs. Nifty which has been flat, has seen a downward curvature. This is a good opportunity to go short on the stock with stop loss at 100, the stock is likely to move to the early 80's next couple of weeks.