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We recommend a buy in the stock of Kirloskar Brothers from a short-term perspective. It is seen from the charts of the stock that after recording a 52-week low at Rs 111 on March 18, the stock bottomed out, triggered by positive divergence in daily moving average convergence divergence indicator. Since then, the stock has been trending up. In late May, the stock took support at around Rs 135 and resumed its uptrend. Short-term trend is also up for the stock .
On Monday, the stock rose nine per cent with extraordinary volumes and it penetrated its immediate key resistance at Rs 168 and also closed above its 200-day moving average, thus reinforcing the uptrend. The daily relative strength index is featuring in the bullish zone and weekly RSI is on the brink of entering into the bullish zone from the neutral region.
Daily MACD has signalled a buy and from May it has been moving higher in line with the stock's price movement. We are bullish on the stock from a short-term horizon. We expect the stock's upward momentum to continue and reach our price target of Rs 183 or Rs 189 in the ensuing trading sessions. Short-term traders can buy the stock with stop-loss at Rs 172.5 levels.
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