We recommend a buy in the stock of Balrampur Chini Mills from a short-term perspective. It is apparent from the charts of the stock that it has been on an intermediate-term uptrend since it registered its 52-week low of Rs 32.7 in December 2011. Its key support base at around Rs 48 provided support in May and June this year. The stock subsequently resumed its up-move and is in a medium-term uptrend. Reinforcing its uptrend, the stock gained 10 per cent last week.
On Monday, this upward momentum continued and it surged 6.7 per cent breaching a key resistance at Rs 62. We notice that there is an increase in volumes over the past five trading sessions. The stock is hovering well above its 50 and 200-day moving averages. Both daily and weekly relative strength indices are featuring in the bullish zone. Likewise, daily as well as weekly moving average convergence divergence indicators are hovering in the positive terrain implying upward momentum.
We are bullish on the stock from a short-term perspective. We expect its up move to prolong and reach our price target of Rs 66.5 or Rs 68.5 in the ensuing trading sessions. Traders with short-term perspective can buy the stock while maintaining stop-loss at Rs 62.