Investors with a short-term perspective can buy the Tamil Nadu Newsprint & Papers at current levels. The stock has been in a medium-term uptrend since it took support at around ₹87 in early May this year. But the stock had encountered a key resistance at ₹120 in late June and started to move sideways in a narrow band between ₹110 and ₹120. Recently, the stock reverses higher taking support at ₹110 and the trend is positively biased.

On Tuesday, the stock had jumped 3.9 per cent accompanied by above average volume, breaching its 21- and 50-day moving averages. This rally has strengthened the medium term uptrend. The daily relative strength index has entered the bullish zone from the neutral region and the weekly RSI is charting higher in the neutral region. Both the daily as well as the weekly price rate of change indicators are hovering in the positive terrain implying buying interest.

The short-term outlook is positively biased and the stock has potential to trend upwards exceeding the immediate resistance at ₹120. Such a breakthrough can push the stock northwards to the price targets of ₹124 and ₹126 in the coming trading sessions. Traders can buy the stock with a stop-loss at ₹116. (Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)

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