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Investors with a short-term perspective can consider buying the stock of Jain Irrigation Systems at current levels. After marking a 52-week high at ₹133 on July 8, the stock started to decline. Since then it was on a short-term downtrend until it found support at ₹85 last week. The stock formed a bullish engulfing candlestick pattern, a bullish reversal pattern, at this level indicating that the downtrend has come to an end. Moreover, the daily indicators such as relative strength index and price rate of change have displayed a positive divergence implying a trend reversal. Adding to this the stock surged 4 per cent with good volume on Monday.
We are bullish and take a contrarian stance from a short-term perspective as the stock is reversing higher from a significant long-term support backed with daily indicators. The stock’s current upmove can extend and reach the price target of ₹96.5 and ₹98.5 in the upcoming sessions. Buy the stock with a stop-loss at ₹91.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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