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We recommend a buy for the Petronet LNG from a short-term perspective. It is evident from the stock charts that after recording its lifetime high at Rs 185 in August 2011, the stock started to decline. But, the stock found support at around Rs 153 in September 2011. This support level consistently cushioned the stock till mid of January 2012.
Subsequently, the stock resumed its long-term uptrend that has been in place since the early 2009 trough of Rs 33. It breached both the 21- and 50-day moving averages in late January and is currently hovering well above them.
On February 17, the stock jumped 4.6 per cent, with above average volume, breaking through its immediate key resistance around Rs 171. With this up move, both daily as well as weekly relative strength index have entered into the bullish zone from the neutral region.
The daily moving average convergence divergence indicator is moving in line with the stock price indicating upward momentum. We are bullish on the stock from a short-term perspective. We expect the stock's up move to sustain and touch our price target of Rs 179 or Rs 185 in the approaching trading sessions. Traders with short-term perspective can consider buying the stock with stop-loss at Rs 170.5.
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