We recommend a buy in the stock of Monsanto India from a short-term perspective. It is apparent from the charts of the stock that, following a medium-term downtrend from its peak of Rs 792 in February this year, it found support around Rs 600 in late July. The stock took support around this level in August and began to move upwards, triggered by positive divergence in daily as well as weekly moving average convergence divergence indicators.

On Wednesday, the stock jumped 3.5 per cent accompanied by above average volumes, breaching its immediate resistance at Rs 640. This up move has also breached the stock's 21- and 50-day moving averages. The daily relative strength index is featuring in the bullish zone and weekly RSI is inching higher in the neutral region. The daily MACD has signalled a buy and is hovering in the positive territory.

We take a contrarian stance on the stock from a short-term perspective and we are bullish on it. We anticipate its up move to continue and reach our price target of Rs 675 or Rs 690 in the upcoming trading sessions. Traders with a short-term perspective can consider buying the stock with stop-loss at Rs 648.

(This article was published on September 6, 2012)
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