Today's Pick

Marico (Rs 127.6): Buy (Recommendation for 7th Jan)

D Yoganand | Updated on January 06, 2011 Published on January 06, 2011

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We recommend a buy in the stock of Marico from a short-term perspective. It is evident from the charts of the stock that in late 2008 it took support around Rs 50 and has been on long-term uptrend shaping rising peaks and troughs.

Moreover, its intermediate and medium-term trends are also up.

The stock found support around Rs 115 (significant medium-term support) in late December 2010 and rebounded taking support from this level. The stock gradually moved higher breaching its 21- and 200-day moving averages on Wednesday.

Reinforcing the bullish momentum, the stock gained 3 per cent accompanied with high volume on January 6.

With this up move, the stock has penetrated its key immediate resistance around Rs 125, after failing to do so in mid-December.

The stock's long-term uptrend line is intact. Both the daily as well as weekly relative strength indices are inching higher in the neutral region towards the bullish zone.

Daily moving average convergence divergence oscillator signals a buy and is heading to positive territory. Our short-term forecast on Marico is bullish.

We expect its on going up move to continue until it reaches our price target of Rs 131 or Rs 134.5 in the upcoming trading sessions. Traders can consider buying the stock with stop-loss at Rs 124.

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Published on January 06, 2011
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