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Investors with a short-term perspective can buy the stock of RITES at current levels. Since recording a 52-week low at ₹191 in late March this year, the stock has been in a medium-term uptrend. However, the stock had encountered a key resistance at ₹270 in early July and witnessed a corrective decline until it found support at around ₹240 in late July. Subsequently, the stock rebounded taking support at ₹240 in early August and has been in a near-term up-move.
On Monday, the stock gained 5.5 per cent with above average volume, breaking above a key resistance at ₹254. The recent rally has surpassed the 21- and 50-day moving averages and the stock trades well above these moving averages. With the recent up-move the stock appears to have resumed the medium term uptrend.
The daily relative strength index has entered the bullish zone from the neutral region and the weekly RSI is hovering in the neutral region with an upward bias. Besides, the daily as well as the weekly price rate of change indicator are featuring in the positive territory implying buying interest. Overall the short-term outlook is bullish.
The stock has potential to breach the near-term resistance at ₹270 and reach the price targets of ₹273 and ₹278 levels in the ensuing trading sessions. Traders can buy the stock with a stop-loss at ₹256. (Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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