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We recommend a buy in the stock of Jamna Auto Industries from a short-term perspective. It is seen from the charts of the stock that since its 52-week low registered at Rs 75 in mid-December 2011, the stock has been on an intermediate-term uptrend. However, encountering a resistance at Rs 180 in April this year, the stock witnessed a corrective decline. The stock took support at Rs 116, which is a significant long-term base and also coincides with the 61.8 per cent Fibonacci retracement level of its prior up move. Subsequently, the stock started trending higher and appears to have resumed its intermediate-term uptrend.
On Monday, reinforcing the bullish momentum the stock jumped 5.3 per cent breaching its 21- and 50-day moving averages accompanied by above average volumes. The daily as well as weekly relative strength indices are on the brink of entering the bullish zone from the neutral region. Both daily and weekly price rate of change indicators are hovering in the positive terrain implying buying interest. We are bullish on the stock from a short-term perspective. We expect its up move to continue and reach our price target of Rs 148.5 or Rs 153 in the days ahead. Traders with short-term perspective can consider buying the stock with stop-loss at Rs 139.5.
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