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We recommend a buy in India Cements from a short-term perspective. It is clearly visible from the charts of India Cements that it has been on a long-term downtrend from its December peak of Rs 333 (52-week high), forming lower troughs and lower peaks. However, the stock recently found support at Rs 70 levels, which is a significant long-term support level and bounced up. On October 31, the stock penetrated the medium-term down trendline by jumping up almost 16 percent acco mpanied by high volume.

This reversal was triggered by the positive divergence in the daily relative strength index (RSI), which has entered in to the neutral region from the bearish zone. The weekly RSI is recovering from the deep oversold area. Moreover, we notice a weekly bullish piercing candlestick pattern that indicates short-term trend reversal.

We are bullish on the stock from a short-term perspective. We anticipate the stock to rally until it hits our price target of Rs 98 in the forthcoming trading sessions. Traders with short-term perspective can buy the stock while maintaining a stop-loss at Rs 82.

Yoganand D.

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