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After breaking out of the resistance at ₹310 last week, the stock of Carborundum Universal rallied and registered a fresh 52-week high of ₹363.7 on Monday. The formation of fresh highs indicates considerable positive momentum and the price action in the daily chart hints at further appreciation in price. So, traders with short-term perspective can initiate fresh longs.
The stock, which lost about 50 per cent in March, marked a low of ₹178.9 in the final week of the same month. But then, the stock attempted to recover only to enter a broad sideways trend. That is, it has largely been oscillating between ₹235 and ₹285 between July and October.
Following this, the scrip gained strength and broke out of the range before a couple of weeks, turning the outlook positive. Corroborating the bullish bias, the daily relative strength index has been moving up and similarly, the moving average convergence divergence indicator is charting an upward trajectory – bullish indications.
Traders can buy the stock with stop-loss at ₹330 and look for a potential short-term target of ₹370.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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