A 7 per cent jump by the stock of Greaves Cotton on Wednesday pushed it out of a narrow sideways range, providing a buying opportunity for traders with a short-term horizon. Since reversing higher from the key base area of ₹57 in early March, the stock has been on an intermediate-term uptrend. The medium-term trend is also up for the stock. The stock has gained over 15 per cent so far this week, decisively breaking through its long-term resistance level of ₹105. Volumes have been increasing over the past two trading days.

The relative strength index on the daily chart has entered the bullish zone from the neutral region, while the weekly RSI continues to feature in the bullish zone. The daily moving average convergence divergence indicator has signalled a buy and is hovering in the positive territory backing the stock’s uptrend. The short-term forecast is bullish. The stock can extend its uptrend and knock the price targets of ₹116.5 and ₹118.5 in the sessions ahead. Buy the stock with a stop-loss at ₹109.

(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)

(This article was published on June 25, 2014)
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