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We recommend a ‘buy' in the stock of Idea Cellular from a short-term perspective. This is one of the rare stocks that has weathered the bout of correction witnessed in August pretty well; gaining 6 per cent in this period. The stock is also one of the out-performers of 2011 with YTD gains of 44 per cent. It has long-term resistance around Rs 83. This hurdle was shattered in July and the stock is currently holding firmly above, despite the ongoing turbulence.
Idea Cellular also closed at a 38-month high on Tuesday and is poised just below the psychological resistance at Rs 100. Relative strength index in the daily chart is placed firmly in the bullish zone while the moving average convergence divergence oscillator in the daily chart is signalling a buy in the short-term time-frame.
The stock can head higher to Rs 102 or Rs 110 in the days ahead. Short-term investors can consider buying the stock with the stop at Rs 98.
The analysis and opinion expressed in these columns are based on the technical analysis of the past price behaviour. The stop-loss level provided with the recommendation is important. The original view would stand negated if the stop-loss level is breached. There is a risk of loss in trading
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