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We recommend a ‘buy’ on Gujarat State Petronet from a short-term trading horizon. It is apparent from the charts of Gujarat State Petronet that its long-term downtrend halted at Rs 25. It formed a bullish double bottom reversal pattern between October 2008 and March 2009 before the trend reversed upward. The stock has been on an intermediate-term uptrend shaping higher peaks and higher bottoms, since the January low of Rs 26. In early May, the counter’s uptrend accelerated, conclusively breaching the 200-day moving average. It is currently trading way above this average. The weekly trading volumes have increased over the past five weeks. Both daily and weekly relative strength indices (RSI) are featuring in the bullish zone. The weekly moving average convergence and divergence indicator has entered into positive territory. Our short-term forecast for the stock is bullish. We expect its up move to continue, until it hits our price target of Rs 69 in the impending trading sessions. Traders with short-term trading perspective can buy the stock while maintaining a stop-loss at Rs 58.50.

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