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We recommend a buy in Future Capital Holdings from a short-term perspective.

It is clearly evident from the charts of Future Capital Holdings that it had been on an intermediate-term downtrend from its February high of Rs 1,190 to its 52-week low of Rs 258, recorded in early July.

The stock found support at around Rs 275 and it broke through the intermediate-term down trendline by jumping up 19 per cent on July 23. Subsequently the stock began to move sideways.

On August 22, the stock surged almost 6 per cent, accompanied with above average volume. The stock has formed a bullish engulfing candlestick pattern (a bullish reversal pattern) reinforcing bullishness. Since its 52-week low, the stock has been on a medium-term uptrend.

The daily relative strength index is rising in the neutral region towards the bullish zone.

Moreover, the daily moving average convergence and divergence is featuring in the positive territory. Our short-term forecast for the stock is bullish.

We expect the stock to move up until it hits our price target of Rs 392 in the approaching trading sessions. Traders with short-term perspective can buy the stock while maintaining a stop-loss at Rs 338.

Yoganand D.

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