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We recommend a buy in Nestle India at current price levels. The weekly chart shows that Nestle India has been on a long term uptrend since March 2007 from Rs 876 levels. However, the stock met with a significant resistance at Rs 1,350 in late September and has been moving sideways between this resistance and the long term uptrend line since then. On October 26, the stock penetrated the 21-day moving average by gaining more than 3 per cent and is near the significant resistance at Rs 1,350 again.

The weekly momentum indicators are showing prolonged bullish momentum. Immediate support for the stock is at Rs 1,240 and the next support is at Rs 1,150. Short term investors can buy the stock with stop loss at Rs 1,260. Considering that the uptrend is still intact, we expect the stock to break through the current resistance and move up Rs 1,470 in the short term, with a minor pausing around Rs 1,400.

Yoganand D.

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