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We recommend a buy in Rolta India from a short-term perspective. It is apparent from the charts of Rolta India that after encountering significant resistance at around Rs 340 in early September, it began to decline and has been on a medium-term downtrend. This medium-term downtrend of the stock was very sharp, in short span of four weeks it recorded new 52-week low of Rs 134 on October 10.

However, the stock reversed direction by taking support from its significant long-term support level of Rs 140 and bounced up sharply. The daily relative strength index has recovered from the oversold area and the weekly RSI is also recovering from that area. In Bollinger bands, we notice that the stock price is trading closer to the lower band, indicating that it is oversold.

We take a contrarian view on the stock from a short-term perspective and anticipate its current up move to prolong until it hits our price target of Rs 190 in the upcoming trading sessions. Traders with short-term perspective can buy the stock while maintaining a stop-loss at Rs 160.

Yoganand D.

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