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We recommend a buy in Gujarat State Petronet from a short-term perspective. It is evident from the charts that the stock has been forming higher peaks and higher troughs since January low of Rs 26. However, after recording the peak of Rs 65 in early June, the stock witnessed a short-term pull-back. The significant support in the band of Rs 48 and Rs 50 arrested the stock’s decline. Moreover, presence of intermediate-term up-trendline around this support reinforced the bullish momentum in the stock. The stock appears to have resumed its intermediate-term uptrend. On July 7, the stock penetrated 21- and 50-day moving averages by gaining almost 8 per cent with heavy volume. The weekly relative strength index is on the brink of entering the bullish zone and the daily RSI is rising in the neutral region. Our short-term outlook is bullish for the stock. We expect it to move up until it hits our price target of Rs 60. Traders with a short-term perspective can buy the stock while maintaining a stop-loss at Rs 51.

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