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We recommend a buy in SREI Infrastructure Finance stock from a short-term trading perspective. It is evident from the charts of this stock that it was on an intermediate-term downtrend from August 2008 high to early December 2008 low (from Rs 130 to Rs 35). This December low is also its 52-week low and a significant long-term support level for the stock. It recently bounced up, forming a double bottom around the previous trough at Rs 35. On January 2, the stock conclusively penetrated its intermediate-term down trendline as well as 21-day moving average by jumping 11 per cent. The volume was heavy during this jump. The daily relative strength index (RSI) is rising in the neutral region towards the bullish zone and weekly RSI is recovering from the oversold territory. Considering the penetration of the stock’s intermediate-term down trendline and the presence of significant support band at Rs 35 to Rs 40, we are bullish on it from a short-term perspective. We expect the stock to move up until it hits our price target of Rs 52 in the approaching trading sessions. Traders with short-term perspective can buy the stock while maintaining a stop-loss at Rs 43.

Yoganand D.

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