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Friday, March 5, 1999
Digital Equipment: Time to exit
K Seshadri
In Digital Equipment both the stochastic indicator as well as the RSI indicator have signalled a sell. The RSI indicator has to be given more weightage. The picture shows the RSI indicator signalling a sell earlier at Rs 415 and the scrip came down to Rs 325. The on balance volume gives some good directions. While volume built up as the scrip went up from Rs 167 level, the peak volume had built up by February 12. Thereafter there has been no further build up.And consider this. With the scrip having appreciated 2.5 times since its Rs 160 level, it would be unrealistic to expect any sharp gains further ahead. A silent slip could do damage. As Infosys drops, you will find resonance in other scrips. And comparatively Digital has no fundamental strength to back this high price. Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
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