The stock’s strong reversal on Monday, in the form of a rally towards the end of session, offers an opportunity for traders with a short-term perspective to go long on the stock. MCX gained more than 5 per cent with above average volumes in the last trading session. Since early January, the stock has been on a sideways consolidation phase in the band between ₹470 and ₹600. In late May, the stock reversed higher taking support around the lower boundary.
MCX is now testing the upper boundary of the afore-mentioned sideways range with a positive bias. The stock is hovering well above its 50- and 200-day moving averages. Both the daily as well as weekly moving average convergence divergence indicators are now featuring in the positive territory, indicating upward momentum. There is a high possibility of it breaching its upper boundary and trending upwards in the short term. The targets are ₹622 and ₹635. Buy the stock while maintaining a stop-loss at ₹585.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)