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We recommend a buy in the stock of Gujarat Fluorochemicals from a short-term perspective. It is seen from the charts of the stock that it has been on a long-term uptrend from its February low of Rs 50, forming higher peaks and troughs. The stock found base at its longer-term significant support around Rs 170 in late November 2010 and bounced higher. Since then, it is on a steady medium-term uptrend, backed with good volumes in the advancing days. On January 12, the stock emphatically broke through a key resistance (August and September 2010 peaks) by jumping 7 per cent. We notice that there is an increase in volumes over the past three trading sessions. The stock is trading well above its 21 and 50-day moving averages. Both daily and weekly relative strength indices are featuring in the bullish zone and monthly RSI has entered in to this zone after three years. Moreover, daily as well as weekly moving average convergence divergence oscillators are hovering in the positive territory implying upward momentum. Our short-term outlook on the stock is bullish. We expect it’s ongoing up move to prolong until it reaches our price target of Rs 252.5 or Rs 260 in the forthcoming trading session. Traders with short-term perspective can consider buying the stock with stop-loss at Rs 237.
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