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We recommend a buy in the stock of Andhra Sugars from a short-term perspective. It is seen from the charts of the stock that since taking support at around Rs 86 in June 2011, the stock has been on an intermediate-term uptrend. Medium-term trend is also up for the stock from its December 2011 trough. Strengthening this uptrend, the stock surged 3.6 per cent penetrating a key resistance at Rs 137 on Monday. There is an increase in volumes over the past two trading sessions.
The stock is hovering well above its 50- and 200-day moving averages. The daily relative strength index has entered into the bullish zone implying upward momentum. Its weekly RSI is featuring in the bullish zone. Both the daily and weekly moving average convergence divergence indicators are featuring in the positive zone.
The stock's medium-term uptrend-line is in tact and we are bullish on it. We expect the stock to move upwards and reach our price target of Rs 146 or Rs 150 in the trading sessions ahead. Traders with short-term perspective can buy the stock with stop-loss at Rs 137.
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