We recommend a buy in the stock of Wochardt from a short-term perspective. It is evident from the charts of the stock that it has been trending higher since bottoming out in May 2010 around Rs 115. The stock subsequently accelerated higher between August and November 2010 and encountered resistance in the band of Rs 400 and Rs 420. In February, the stock failed to surpass this resistance band adding to its significance.

The stock was on a medium-term decline until it found support around Rs 300 in March. However, the stock took more than two months to breakthrough its medium-term down trend-line that was in place since February this year. On Thursday, the stock conclusively broke through its downtrend-line by surging four per cent. It is currently trading well above its 21- and 50-day moving averages.

We notice that there has been an increase in volumes over the past four trading sessions. The daily relative strength index has entered the bullish zone and weekly RSI is on the brink of entering the bullish zone. Daily moving average convergence divergence indicator has signalled a buy and is hovering in the positive territory.

We are bullish on the stock from a short-term perspective. We anticipate it to move higher until it touches our price target of Rs 380 or Rs 390 in the forthcoming trading sessions. Traders with short-term horizon can buy the stock with stop-loss at Rs 359.

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