We recommend a buy in the stock of Eveready Industries India from a short-term perspective. It is apparent from the charts of the stock that since peaking out last September around Rs 81, it was on an intermediate-term downtrend until it found support at Rs 36 in mid-June this year. However, taking support at its long-term support band between Rs 35 and Rs 37 and also triggered by positive divergence in weekly moving average convergence divergence, the stock reversed its direction.
Backed with good volumes, it has been on a near-term uptrend since then. On Tuesday, the stock emphatically broke through its significant resistance which it was testing for past four trading sessions, by gaining 6.7 per cent. It broke through its intermediate-term downtrend line and its immediate resistance at Rs 42. The 14-day relative strength index has entered into the bullish zone and weekly RSI has entered the neutral region from bearish zone.
The stock is hovering slightly above its 21- and 50-day moving averages. We are bullish on the stock from a short-term perspective. We expect its near-term uptrend to continue until it touches our price target of Rs 45.5 or Rs 47.5 in the days ahead. Traders looking for short-term investment can buy the stock with stop-loss at Rs 42.
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