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Investors with a short-term perspective can consider buying the stock of Dena Bank. It is seen from the charts of the stock that its medium-term downtrend got halted in February 2011 by finding support in the range between Rs 85 and Rs 90 which is a significant long-term significant base. The stock however, changed its direction triggered by positive divergence displayed in the daily moving average convergence. Since this February low of Rs 86.2, the stock has been on a short-term uptrend and it appears to have resumed its long-term uptrend as well.
On Tuesday, the stock jumped four per cent accompanied by heavy volumes, breaking through its significant resistance as well as its 200-day moving average at Rs 110. The 14-day relative strength index is featuring in the bullish zone and weekly RSI is likely to enter into this zone. Daily MACD and price rate of change indicators are hovering in the positive territory implying upward momentum and buying interest.
Our short-term forecast on the stock is bullish. We anticipate it to trend northwards and touch our price target of Rs 116.5 or Rs 120 in the upcoming trading sessions. Traders with short-term horizon can buy the stock while maintaining stop-loss at Rs 110.
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