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We recommend a buy in the stock of PTC India from a short-term perspective. It is apparent from the charts of the stock that following its peak at Rs 145 in November 2010, the stock started to decline. The stock was on an intermediate-term downtrend until it found support at its long-term base level of Rs 70 in mid-June.
The stock reversed direction triggered by positive divergence in daily relative strength index and weekly moving average convergence divergence indicators. Since then, it has been on a nascent uptrend. Accompanied by extraordinary volumes, the stock surged six per cent, breaking through its intermediate- and medium-term downtrend line on Thursday. This up move has also breached its 21- and 50-day moving averages. Daily RSI is on the brink of entering in to the bullish zone from the neutral region and weekly RSI has entered into the neutral region from the bearish zone. The daily price rate of change indicator is featuring in the positive territory signalling buying interest.
We are bullish on PTC India from a short-term horizon. We expect its current uptrend to sustain until it hits our price target of Rs 84.5 or Rs 87 in the ensuing trading sessions. Traders with short-term perspective can consider buying the stock with stop-loss at Rs 79.5 levels.
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