Stocks

REC (₹106.7): Buy

Yoganand D BL Research Bureau | Updated on August 06, 2020 Published on August 06, 2020

The stock of REC gained 5 per cent with above average volume on Thursday, rebounding from a key support level of ₹100. Investors with a short-term view can buy the stock at current levels. In late March, the stock recorded a 52-week low at ₹79 and halted the sharp fall. Subsequently the stock reversed direction triggered by positive divergence on the daily indicator and has been in a medium term uptrend since March low.

Following a short-term corrective decline the stock took support at around ₹100 in late July and again in early August. The stock's recent gain has conclusively breached the 21- as well as 50-day moving averages and the short-term down trend-line decisively. The daily relative strength index is on the brink of entering the bullish zone from the neutral region and the weekly RSI is charting higher in the neutral region. The significant long-term support at ₹100 had cushioned the stock well in the recent times. It appears to have resumed the medium term uptrend.

The daily price rate of change indicator is likely to enter the positive territory. The near-term stance is bullish. The stock can extend the up-move and reach the price targets of ₹111 and ₹113.5 in the ensuing trading sessions. Traders can buy the stock with a stop-loss at ₹104.

(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)

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Published on August 06, 2020
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