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We recommend a buy in the stock of Ruchi Soya Industries from a short-term perspective. It is apparent from the charts of the stock that after encountering resistance at Rs 75 in early January, the stock resumed its intermediate-tem downtrend. Following a medium-term downtrend, the stock found support at around Rs 57 recently. Subsequently, the stock reversed direction triggered by positive divergence in the daily relative strength index.
On Wednesday, the stock advanced 7.5 per cent with above average volumes, breaking through its immediate resistance at Rs 64 and its 21-day moving average. We notice that there is an increase in daily volumes over the past four trading sessions. The daily moving average convergence divergence indicator has signalled a buy and weekly indicator is displaying prolonged positive divergence backing the stock’s trend reversal.
We are bullish on the stock from a short-term perspective. We expect its up-move to continue and reach our price targets of Rs 68.5 or Rs 70 in the approaching trading sessions. Traders with a short-term perspective can consider buying the stock with stop-loss at Rs 64.30 levels.
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