Gujarat State Petronet (GSPL) was in the limelight on Monday as the stock gained 3.4 per cent accompanied by a strong surge in volume. After taking support around Rs 48 in July-August 2013, the stock started trending northwards. Since then it has been on a medium-term uptrend. However, after witnessing resistance at around Rs 65 in December 2013, the stock started moving sideways. Monday’s gain of 3.4 per cent has helped the stock decisively breach the moving average compression (21-, 50- and 200-day moving averages) at around Rs 58.
The relative strength index on the daily chart has started moving upwards and is on the brink of entering the bullish zone from the neutral region. Other daily indicators are positively biased. The weekly indicators are also trending higher and are on the verge of entering the positive territory.
The medium-term uptrend line is intact. The short-term outlook is bullish for GSPL. It can prolong its upmove and reach the price target of Rs 62.5 and then move on to Rs 65 in the ensuing trading sessions. Traders with a short-term perspective can consider buying the stock with a stop-loss at Rs 58.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)