We recommend a buy in the stock of United Phosphorus from a short-term perspective. It is apparent from the charts of the stock that following a medium-term downtrend from its February 2012 peak of Rs 168, the stock found base at its key long-term support level at Rs 110 in June. This level provided support for the stock in August and November and arrested it from declining. Triggered by positive divergence in the daily relative strength index and price rate of change, the stock reversed direction and started moving higher in late November. Since then, the stock has been in a short-term uptrend. After two weeks of sideways movement around Rs 125, the stock advanced more than 4 per cent in the previous week implying continuation of its short-term uptrend. The stock is hovering well above its 50- and 200-day moving averages. The daily RSI has entered the bullish zone and weekly RSI is climbing higher in the neutral region. The daily price rate of change indicator has entered the positive territory indicating buying interest. We are bullish on the stock from a short-term perspective. We expect its upward momentum to continue and reach our price target of Rs 134 or Rs 136.5 in the approaching trading sessions. Traders with short-term perspective can consider buying the stock while maintaining stop-loss at Rs 126.20.

(This article was published on December 30, 2012)
XThese are links to The Hindu Business Line suggested by Outbrain, which may or may not be relevant to the other content on this page. You can read Outbrain's privacy and cookie policy here.