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We recommend a buy in Jain Irrigation Systems from a short-term trading perspective. It is apparent from the charts of the stock that it was on an intermediate-term downtrend between early August and early December from Rs 594 to Rs 229.

However, the stock began an upward trend from Rs 229 level, which is a 52-week low and has been on a medium-term uptrend. This trend reversal had been supported by a positive divergence in the weekly relative strength index (RSI). The stock conclusively broke through its intermediate-term down trendline by gaining 6 per cent on December 12. Subsequently, the stock penetrated a key resistance at Rs 310, reinforcing the medium-term uptrend. Moreover, the stock is trading well above its 21-and 50-day moving averages.

The daily RSI is featuring in the bullish zone and the weekly RSI has entered in the neutral region from the bearish zone.

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 385 in the approaching trading sessions. Traders with short-term perspective can buy the stock while maintaining a stop-loss at Rs 330.

Yoganand D.

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