Investors with medium-term perspective can consider buying the stock of Provogue India (Rs 46.5), a premium retailer in apparel and accessories. After encountering resistance at Rs 80 in October 2010 and again in November, the stock started to decline and was on a medium-term downtrend until it found support around Rs 33 (a longer-term significant base level) in February 2011.

The stock bottomed out and changed direction subsequently. Since then, it has been on a short-term uptrend. On March 31, the stock conclusively breached its medium-term downtrend line and its 21- as well as 50-day moving averages around Rs 40. Moreover, on Friday, the stock broke through its immediate key resistance level of Rs 45 by gaining 3 per cent.

We observe that there is an increase in volumes over the past five trading sessions. The 14-day relative strength index is featuring in the bullish zone and weekly RSI has entered in to the neutral region from the bearish zone. Daily moving average convergence divergence indicator is moving in line with the stock and it is on the brink of entering in to the positive territory indicating upward momentum. The daily price rate of change indicator is hovering in the positive territory denoting continued buying interest in the stock. Our medium-term outlook on Provogue is bullish.

We believe that the stock has the potential to continue its northward journey in the medium-term and reach our price target of Rs 55, with a minor pause around Rs 51. Investors with medium-term horizon can consider buying the stock with stop-loss at Rs 42.

Follow-up: B.L. Kashyap and Sons (Rs 26.2)

The stock moved higher in line with our expectation last week. It has gained 6.5 per cent with good volume and is pausing around Rs 27. We re-state our medium-term bullish outlook on the stock with target and stop-loss mentioned last week.

(This recommendation is based on technical analysis. There is a risk of loss in trading.)

BL Research Bureau

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