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We recommend a buy in HEG from a short-term perspective. Referring to the chart of HEG, we see that the stock had been on a medium-term downtrend from its January 2008 high of Rs 609 to its March low of Rs 216.

However, the stock found support at around Rs 240 level in late March (coincides July 2007 peak) and commenced to move up. Subsequently, the stock breached the medium-term down trendline and then the 21-day moving average.

We notice that there is an increase in volume in the last three trading days. Moreover, the long-term uptrend of the stock, which began in June 2006, is still in place. The stock appears to have resumed the long-term uptrend. The daily momentum indicator is on the verge of entering the bullish zone from the neutral region. The moving average convergence and divergence is also likely to enter into the positive territory. We are bullish on the stock from a short-term point of view. We expect the stock to move up to our price target of Rs 335 in the short-term. Investors with short-term perspective can buy the stock, while keeping the stop-loss at Rs 275.

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