We recommend a buy in the stock of IRB Infrastructure Developers from a short-term perspective. It is apparent from the chart of the stock that after encountering resistance at around Rs 205 in April, the stock started to decline. In May, it tumbled steeply and hit a 52-week low at Rs 100 on May 14. However, the stock changed its direction thereafter and has been on a modest medium-term uptrend. However, last week, the stock fell below the lower boundary of the daily Bollinger Bands signalling oversold. Its daily relative strength index also reached oversold levels implying a near-term up move. Further, key support around Rs 112 arrested the stock's decline.
On Monday, the stock moved out of oversold levels by gaining more than 10 per cent accompanied by good volumes. This rally has breached a key resistance at Rs 120 reinforcing the bullish momentum and the stock has resumed its medium-term uptrend. The daily RSI has entered the neutral region from the negative zone.
We are bullish on the stock from a short-term perspective. We anticipate its up move to continue and reach our price target of Rs 129.5 or Rs 133.5 in the approaching trading sessions. Traders with short-term perspective can buy the stock with stop-loss at Rs 122.