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We recommend a buy in Godawari Power and Ispat from a short-term perspective. We see that the stock has been on a medium-term up trend since its March 2008 trough of Rs 150 (a key support level).

On June 26, the stock jumped up more than 4 per cent conclusively crossing over the 21- and 50-day moving averages.

With this jump, the daily relative strength index has entered the bullish zone and the weekly RSI is rising in the neutral region. We notice that there is an increase in volume over the past three trading days. The moving average convergence and divergence is on the brink of entering the positive territory.

The medium-term up trendline is also still in place. Our short-term forecast for the stock is bullish and we expect it to move up, until it hits our price target of Rs 235 in the forthcoming trading sessions. Traders with a short-term perspective can buy the stock while maintaining stop-loss at Rs 201.

BL Research Bureau

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