We recommend a buy in the stock of Bajaj Corp from a short-term perspective. It is seen from the charts of the stock that ever since hitting a low at Rs 73 in February 2011, the stock has been on a long-term uptrend. Both medium- and short-term are also up for the stock. It emphatically breached its 21- and 50-day moving averages early this month and is hovering well above them.

On Tuesday, the stock jumped 5.6 per cent with good volumes decisively breaking through a key resistance zone between Rs 130 and Rs 133. The daily as well as weekly relative strength indices are featuring in the bullish zone. Similarly, both daily and weekly moving average convergence divergence indicators are hovering in the positive terrain implying upward momentum. The daily and weekly price rate of change indicators are featuring in the positive territory implying buying interest. With the stock's medium-term uptrend line being intact and its recent resistance breakthrough, we are bullish on the stock from a short-term horizon. We expect its up move to continue and reach our price target of Rs 145 or Rs 149 in the approaching trading sessions.

Traders with short-term perspective can buy the stock with stop-loss at Rs 136.

(This article was published on July 24, 2012)
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