We recommend a buy in the stock of Cox & Kings from a short-term perspective. It is seen from the charts of the stock that after encountering resistance at Rs 195 in March, it resumed its intermediate-term downtrend. However, the stock found support at Rs 120 in mid-June and started moving higher. This support level cushioned the stock in late July. Triggered by positive divergence in daily relative strength index and moving average convergence divergence indicator, the stock started to move higher once again.
On Tuesday, the stock jumped 12 per cent accompanied by extraordinary volumes, breaching its 21- and 50-day moving averages. With this rally, we notice formation of a double bottom with neck line at Rs 140. The daily relative strength index has entered into the bullish zone from the neutral region and weekly RSI is moving higher into the neutral region. The daily MACD has signalled a buy.
We are bullish on the stock from a short-term perspective. We expect the stock to breach its neckline and reach our price target of Rs 144 or Rs 148 in the forthcoming trading sessions. Traders with a short-term perspective can consider buying the stock with stop-loss at Rs 135.5.