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We recommend a buy in the stock of Bata India from a short-term trading perspective. The stock is in a medium-term corrective phase since last October. This fall is halting at the 50 per cent retracement of the rally from the December 2011 low of Rs 491. The stock has formed a double bottom around Rs 755. The morning star pattern in the daily candlestick chart is also an upward reversal pattern. Momentum indicators are beginning to perk up.
The relative strength index in the daily chart is signalling bullishness by forming higher bottoms while the rate of change oscillator is moving higher, on the verge of crossing into the bullish zone.
Investors can buy the stock with stop-loss at Rs 765. The targets for the stock are Rs 796 and Rs 820.
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