We recommend a buy on the stock of Jaiprakash Associates from a short-term perspective. It is apparent from the charts of the stock that following a medium-term downtrend from its 52-week high of Rs 106 marked in early December 2012; the stock appears to have found support in the zone between Rs 60 and Rs 63 in late March 2013. After retesting this support zone in the previous week, the stock started to move upwards triggered by positive divergence in the daily moving average convergence divergence indicator. On Friday, the stock jumped 5 per cent breaching an important resistance at Rs 68 and also 21-day moving average. There is an increase in daily volume in the past three trading sessions. Both the daily and weekly relative strength indices are moving higher in the neutral region towards the bullish zone. The daily MACD has signalled a buy. The daily price rate of change indicator has entered the positive from the negative territory implying buying interest. We are bullish on the stock from a short-term perspective. We expect its upmove to continue and reach our price target of Rs 73.5 or Rs 75 in the forthcoming trading sessions. Traders with short-term perspective can consider buying the stock with stop-loss at Rs 69.2 level.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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