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We recommend a buy in the stock of Aban Offshore from a short-term perspective. It is seen from the charts of the stock that its significant support around Rs 325 (December 2011 trough) arrested its medium-term downtrend in early June 2012. However, the stock changed direction triggered by positive divergence in daily moving average convergence divergence indicator. After hitting a 52-week low, the stock has been on a short-term uptrend.
On Thursday, it jumped six per cent with extraordinary volumes, emphatically breaching its immediate resistance at Rs 355. Further, this rally has also breached the 21- and 50-day moving averages reinforcing the short-term up move. The daily relative strength index has entered the bullish zone and weekly RSI is featuring in the neutral region.
We are bullish on the stock from a short-term perspective. We anticipate its rally to prolong and touch our price target of Rs 389 or Rs 400 in the forthcoming trading sessions. Traders with short-term perspective can consider buying the stock with stop-loss at Rs 368.
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