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We recommend a buy in Container Corporation of India from a short-term perspective. It is evident in the charts that the stock has been on a long-term uptrend since 2003. However, the stock has been on a intermediate term downtrend for almost seven months after marking its all-time high in June 2007 at Rs 2,444. We see that the intermediate term downtrend has retraced 38.2 per cent (fibonacci retracement) of this long-term uptrend.

Recently, the stock found support at Rs 1,530 which coincides with the position of the long-term up-trend line, and reversed from there. On January 31, the stock resumed the long-term uptrend by surging 5 percent accompanied by good volume. This resumption of the uptrend has been supported by the positive divergence in the daily momentum indicator. The daily momentum indicator is on the brink of entering the bullish zone. We are bullish on the stock in the short-term and expect it to achieve the short-term target of Rs 2100. Short-term investors can buy the stock with stop at Rs 1650 levels.

Yoganand D.

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