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We recommend a buy in Sesa Goa from a short-term perspective. It is evident from the charts of Sesa Goa that it has been on an intermediate-term downtrend from its early May high of Rs 220. Since then, the stock has been forming lower troughs and lower peaks. While trending down, the stock penetrated key support levels at Rs 132 and Rs 100 one after another. However, the stock recently found support in the support band between Rs 60-65, recording a 52 week low of Rs 63.60 and bounced up sharply. The stock has almost gained 20 per cent from this low, reinforcing the bullish momentum. The daily relative strength index (RSI) which is hovering in the bearish zone, is displaying positive divergence and the weekly RSI is recovering from the oversold area. Furthermore, the moving average convergence and divergence is also displaying positive divergence. We are bullish on the stock from a short-term horizon. We expect the stock to move up further until it hits our price target of Rs 90 in the upcoming trading sessions. Traders with short-term perspective can buy the stock while maintaining stop-loss at Rs 75.

Yoganand D.

BL Research Bureau

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