We recommend a buy on the stock of SRF from a short-term perspective. It is apparent from the charts of the stock that it has been on an intermediate-term downtrend from it July 2012 peak of Rs 248 levels. However, the stock changed direction, after registering a 52-week low at Rs 125.5 on August 5.

This reversal was triggered by positive divergence in the daily relative strength index and moving average convergence divergence indicators. Since then, the stock has been on a short-term uptrend. After testing key resistance at around Rs 152 for more than three weeks, the stock broke out of it by gaining 5.5 per cent with good volume on Friday. The stock is hovering well above its 21 and 50-day moving averages. The daily relative strength index is featuring in the bullish zone and the weekly RSI is moving higher in the neutral region.

The daily MACD has been trending up in line with the stock price and is hovering in the positive area implying upward momentum. Both the daily and weekly price rate of change indicators are hovering in the positive terrain indicating buying interest. We are bullish on the stock from a short-term perspective. We anticipate its short-term uptrend to continue and reach our price target of Rs 164 or Rs 167.5 in the approaching trading sessions. Traders with short-term perspective can buy the stock with stop-loss at Rs 154 level.

(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)

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