Indraprastha Gas (₹409.1): Buy

Yoganand D BL Research Bureau | Updated on October 27, 2020

The stock of Indraprastha Gas gained 4 per cent accompanied by above average volume, breaching a key resistance at ₹400 on Tuesday. This rally has strengthened the near-term uptrend that began from the early October low of ₹364. Moreover, the on-going uptrend has altered the short-term downtrend that was in place since late September.

Interestingly, the stock has broken out of a flag pattern formed after a sharp rally on October 22 and extended the up-move. This pattern is a short-lived continuation pattern that forms a minor pause or consolidation before the previous move continues. In this case, the previous move is the uptrend.

The recent rally has conclusively breached the 50-day moving average and trades well above 21- as well as 50-day moving averages. The daily relative strength index has entered the bullish zone from the neutral region and the weekly RSI features in the neutral region with an upward bias.

Besides, the daily price rate of change indicator hovers in the positive terrain implying buying interest. The short-term outlook is bullish for the stock.

It has potential to trend upwards and reach the price targets of ₹426 and ₹434 in the coming trading sessions. Traders can buy with a stop-loss at ₹400. (Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)

Published on October 28, 2020

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