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We recommend a buy in the stock of Amara Raja Batteries from a short-term perspective. It is apparent from the charts of the stock that from its March 2009 low at around Rs 30, it has been on a long-term uptrend. Both medium and short-term trends are also currently up for the stock. Following a corrective decline from its all-time high of Rs 262 registered in July 2011 to its late-September low of Rs 200, the stock found support in the range between Rs 200 and Rs 205. Subsequently, triggered by positive divergence shown in daily relative strength index and daily moving average convergence divergence indicator, the stock resumed its uptrend. On Wednesday, the stock climbed 5 per cent accompanied by above average volumes and penetrated its immediate key resistance at Rs 220. The stock is hovering well above its 50 and 200-day moving averages. The daily RSI has entered the bullish zone from the neutral region and weekly RSI is inching higher in the neutral region towards the bullish zone. Daily MACD is on the brink of entering into the positive territory from the negative territory. We are bullish on the stock from a short-term perspective. We anticipate that the stock will move upwards until it reaches our price target of Rs 231 or Rs 238 in the ensuing trading sessions. Traders with short-term perspective can buy the stock while maintaining stop-loss at Rs 216.5.
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