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Investors with a short-term horizon can buy the stock of REC at current levels. The stock has been in an intermediate-term uptrend since taking support at around ₹100 in early December 2018. While trending up, the stock decisively breached a key resistance at ₹127 in late February this year and continued to trend upwards. Key resistance at around ₹152 had limited the stock’s rally in the months of March and April.
Following a corrective decline, the stock surpassed this resistance on Tuesday, by gaining 2.4 per cent with above average volume. With this rally, the stock appears to have resumed the intermediate-term uptrend. Moreover, the short-term trend is also up for the stock. It hovers well above the 50- and 200-day moving averages.
The daily relative strength index features in the bullish zone and the weekly RSI has just entered the bullish zone from the neutral region backing the bullish momentum. Further, the daily and weekly price rate of change indicators hover in the positive terrain implying buying interest. Outlook is bullish for the stock. Short-term targets are ₹162 and ₹165. Traders can buy with a stop-loss at ₹152.5.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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