We recommend a buy in the stock of Pidilite Industries from a short-term perspective. It is evident from the charts of the stock that it has been on a long-term uptrend since bottoming out from its 2009 low of Rs 40. The medium-term trend is also up for the stock. Following a near-term corrective decline, the stock found twin support (key support and up trend-line) at around Rs 260 in late June. Subsequently, the stock resumed its uptrend. On Friday, it jumped 3.7 per cent, breaching its 21- and 50-day moving averages with above-average volume. We notice that there is an increase in daily volume in the past two sessions. The daily relative strength index has entered the bullish zone from the neutral region and the weekly RSI has also entered this zone from the neutral region. The daily moving average convergence divergence indicator has signalled a buy. Both daily and weekly price rate of change indicators are featuring in the positive area, implying buying interest. Considering that the stock's medium-term up trend line is in tact, we are bullish on it from a short-term perspective. We anticipate its up move to continue and reach a price target of Rs 294 or Rs 300 in the ensuing trading sessions. Traders with a short-term perspective can buy the stock with stop-loss at the Rs 276.5 level.

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

(This article was published on July 14, 2013)
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