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We recommend a buy in the stock of Future Capital Holdings from a short-term perspective. It is apparent from the charts of the stock that between this February and June, the stock took support at the zone between Rs 130 and Rs 135 many times marking it as a key long-term base level.
The stock started to trend upwards in late June triggered by positive divergence in daily moving average convergence divergence indicator and weekly relative strength index.
However, last week it encountered resistance at around Rs 200 and witnessed a minor corrective decline until it halted at its immediate support level at Rs 156 on Tuesday. Taking twin support (uptrend line and key medium-term support) at around Rs 156, the stock jumped nine per cent on Wednesday.
This up-move has breached its 200-day moving average. Both daily and weekly relative strength indices are inching higher in the neutral region towards the bullish zone. The stock's medium-term uptrend line is in tact.
We are bullish on the stock from a short-term perspective. We expect it to move higher and reach our price target of Rs 178 or Rs 183.5 in the forthcoming trading sessions. Traders with short-term perspective can consider buying the stock with stop-loss at Rs 168.
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