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Investors with a short-term perspective can buy the stock of ABG Shipyard at current levels. Following a sharp rally from the key support level of ₹220 in late May, the stock met with a significant long-term resistance around ₹310 in early June. Since then, the stock has been on a medium-term downtrend. However, the significant long-term support at ₹220 once again cushioned the stock’s fall in late September and October this year. Triggered by positive divergence in the daily moving average convergence divergence indicators, the stock reversed direction and started to trend northwards.
On Monday, the stock surged 6.5 per cent accompanied by good volumes and decisively breached its 21- and 50-day moving averages. Both the daily and weekly price rate of change indicators are featuring in the positive territory implying buying interest. The short-term outlook is bullish. The stock can extend its rally and reach the price target of ₹252 and ₹258. Buy the stock with a stop-loss at ₹237.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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