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Investors with short-term perspective can consider buying the stock of Jyothy Laboratories. It is apparent from the charts of the stock that following a medium-term downtrend from its all-time high of Rs 321 marked in October 2010; the stock found long-term support in the band between Rs 190 and Rs 200 in early February 2011. This zone provided support for the stock during March and late April. Since February, the stock has been on a broad sideways consolidation in range between Rs 190 and Rs 250. On May 10, the stock emphatically penetrated its 21- and 50-day moving average and its immediate resistance at Rs 222 by jumping 6 per cent. Moreover, we notice that there has been an increase in volumes over past four trading session. The daily relative strength index is on the verge of entering the bullish zone and weekly RSI is inching higher in the neutral region. The 14-day price rate of change indicator is hovering in the positive territory and weekly indicator has entered this territory signalling buying interest. Daily moving average convergence divergence has signalled a buy and is on the brink of entering positive zone. Our short-term outlook on the stock is bullish. We expect it to rally until it reaches our price target of Rs 234 or Rs 241. Traders with short-term perspective can buy the stock with stop-loss at Rs 220.5.
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