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We recommend a buy in the stock of Geometric from a short-term perspective. It is seen from the charts of the stock that in November 2011, it took support at around Rs 36 and started moving higher. Since then, it has been on an intermediate-term uptrend. But the stock's key resistance at Rs 74 arrested the stock from moving higher in mid-February. The stock consolidated sideways for almost two months forming a continuation pattern, ascending triangle pattern.
On Thursday, the stock emphatically broke out this pattern by jumping 11 per cent with extraordinary volume. The stock is hovering well above its 21- and 50-day moving averages. Its daily moving average convergence divergence indicator has signalled a buy and is hovering in the positive terrain implying upward momentum. The daily relative strength index has entered into the bullish zone from the neutral region and weekly RSI is featuring in this zone. Both daily as well as weekly price rate of change are featuring in the positive area indicating buying interest.
Our short-term outlook on the stock is bullish. We anticipate it to rally further and touch our price target of Rs 80 or Rs 82.5 in the approaching trading sessions. Traders with short-term perspective can buy the stock while maintaining stop-loss at Rs 75.
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