Investors with a short-term perspective can buy the stock of Adani Power. On Thursday, the stock surged 3.5 per cent with above average volume breaking out of a flag pattern formation. Volumes are increasing over the past five trading sessions. The stock, bottomed out in December 2014, has been in an uptrend since then. After taking support at around ₹40, the stock changed direction triggered by positive divergence in the daily moving average convergence divergence indicator. While trending up, it decisively breached its 21- and 50-day moving averages.

The daily indicators and oscillators are featuring in the positive territory, implying bullish momentum. Moreover, the stock has emphatically breached a key resistance at ₹49 which has turned into a support level now. The shares of Adani Power can extend its rally and reach the price target of ₹54 and then ₹55 in the ensuing trading sessions. Buy the stock with a stop-loss at ₹50.

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

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