We recommend a buy in the stock of VIP Industries from a short-term horizon. It is apparent from the charts of the stock that following a medium-term downtrend, the stock found support at around Rs 57 in late March and again in mid-April. The stock reversed direction triggered by positive divergence in daily moving average convergence divergence indicator.
On Wednesday, the stock skyrocketed 16 per cent accompanied by extraordinary volume breaking through its immediate resistance at Rs 64. It has also emphatically breached its 21-day moving average line. We notice that there has been an increase in daily volume in the past three trading sessions. The daily MACD has signalled a buy. Further, the daily price rate of change indicator has entered the positive territory from the negative territory implying buying interest.
We are bullish on the stock from a short-term perspective. We expect its rally to continue and reach our price target of Rs 69.5 or Rs 71 in the ensuing trading sessions. Traders with a short-term perspective can consider buying the stock with stop-loss at Rs 65.3 level.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)