We recommend a buy in the stock of Hitachi Home and Life Solutions (India) from a short-term perspective. It is evident from the charts of the stock that following a steep decline in the month of July 2012 from around Rs 155, the stock found support at around Rs 100 and changed its trend in early August. Since then, the stock has been in a medium-term uptrend. In late November, the stock took support at Rs 120 and continued its uptrend.

Short-term trend is up from the stock. On Monday, the stock jumped 6 per cent with good volume, conclusively breaching its moving average compression (21-, 50- and 200-day moving averages). However, the stock is currently testing its key resistance at Rs 140. The daily relative strength index is featuring in the bullish zone and weekly RSI is on the brink of entering this zone from the neutral region. The daily moving average convergence divergence indicator is moving higher in line with the stock price implying upward momentum. Moreover, both daily and weekly price rate of change indicators are hovering in the positive zone indicating buying interest.

Our short-term outlook for the stock is bullish. We expect it to breakthrough the current resistance and reach our price target of Rs 147 or Rs 150 in the ensuing weeks. Traders with short-term perspective can consider buying the stock with stop-loss at Rs 138 levels.

(This article was published on December 17, 2012)
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