Investments at lower levels in Tata Tea has brought impressive returns. The stock has jumped from Rs 222 on May 5, to Rs 482 on August 11, showing an impressive gain of 117 per cent in a short span of three months.

However, in the last couple of days, the stock has been showing signs of weakness. The fall below its 12-day moving average is one of them. The short and medium term RSI (10-day and 21-day) have formed negative divergences, apart from violating their short-term trendlines. The medium term MACD has also posted a negative divergence. All these are pointer towards weakening position of bulls on this counter.

The fact that averages are in positive phase, is the only factor which is in favour of the scrip. This also raises hopes for a short-term rally. Considering these factors, investors are well advised to book profits, at least, partially.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.