Investors with medium-term perspective can consider buying the stock of KPIT Cummins Infosystems (Rs 104). Following a prolonged sideways consolidation phase in the broad range between Rs 70 and Rs 96, the stock broke out conclusively last week. It skyrocketed 24 per cent accompanied by extraordinary volumes. The stock formed strong base by prolonged sideways consolidation which was positive from a long-term perspective. The stock subsequently resumed its long-term uptrend that has been in place since early 2009 low around Rs 10. Medium-term trend is up for the stock. During last week of April, the stock conclusively breached its moving average compression (21, 50 and 200-day moving averages) around Rs 80. It is hovering well above these averages. The weekly and monthly relative strength index are featuring in the bullish zone. The daily as well as weekly moving average convergence divergence indicators are featuring in the positive terrain implying upward momentum. Similarly, the daily and weekly price rate of change indicators are hovering in the positive area indicating buying interest.

Though the stock's near-term stance is sideways the medium-term prospects are looking bright for the stock. We believe that KPIT Cummins Infosystems has the potential to trend higher and touch our medium-term price target of Rs 120, following a small pause around Rs 110. Investors with medium-term perspective can consider buying the stock in declines with deeper stop-loss at Rs 92.

Follow up - Pipavav Defence and Offshore Engineering Company (Rs 83.8)

The stock was volatile and rallied to mark an intra-week high at Rs 87.3 last week. But, gave away some of its gains last Friday. We are bullish on the stock from a medium-term perspective. Investors can consider holding the stock with price target and stop-loss mentioned the previous week.

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

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