SBI- Caution Ahead

SBI has not followed a fibonacci series in the rally that has occured till date. Though it has had a small correction when it retracted 61.8% of its previous levels, it still has remained a very strong stock. However, the following are some patterns that are showing which gives some signal on weakness in its recent price movement.

• It has retracted a full 100% from its previous high of 995. There is some distribution of stock happening at these levels.
• MACD has given its first sign of convergence. With a clean movement on one side, the stock has shown some negative movement.
• RSI has shown the stock in a overbought state a few weeks back. It is currently at 65 and falling.

Given the above parameters, I would recommend a 'sell' in this counter and wait for some correction or a clear upside in the stock. Any upside from 1030 will be a decent bet to start accumulating. However, the stock poses a higher risk of downside than upside.