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We recommend a buy in HCL Infosystems from a short-term trading perspective. It is evident from the charts of HCL Infosystems that it was on a long-term downtrend from its January high of Rs 299 till it found support at Rs 64 – its 52-week low – in November. However, after finding support, the stock reversed direction triggered by the positive divergence in both daily as well as weekly relative strength index (RSI).

In early December the stock breached its long-term down trend-line which was in place since January. The stock has been on a new medium-term up trend since its 52 week low. On December 24, the stock penetrated its 50-day moving average by gaining 4 per cent, reinforcing the bullish momentum.

The daily RSI has entered in the bullish zone from the neutral region and the weekly RSI is on the brink of entering the neutral region. Moreover, the daily moving average convergence and divergence (MACD) has entered in to the positive territory. Our short-term forecast is bullish for the stock.

We expect HCL Infosystems to move up until the stock hits our price target of Rs 93 in the forthcoming trading sessions. Traders with short-term perspective can buy the stock while maintaining a stop-loss at Rs 78.

Yoganand D.

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