We recommend a buy in the stock of Amtek India from a short-term horizon. It is clear from the charts of the stock that after a medium-term downtrend, the stock halted at Rs 65 support level in early April this year. This is a key long-term support for the stock. Subsequently, it changed direction triggered by positive divergence and formation of a bullish engulfing candlestick pattern in the weekly chart. The stock started to trend higher and has been on a short-term uptrend since then.
On Monday, the stock zoomed more than 8 per cent with good volume breaking through an important resistance at Rs 90. We observe that there is an increase in daily volume over the past four trading sessions. The stock is hovering well above its 21- and 50-day moving averages. The relative strength index has entered the bullish zone The daily moving average convergence divergence indicator has entered the positive area implying upward momentum.
Our short-term forecast on the stock is bullish. We expect its rally to continue and reach our price target of Rs 98 or Rs 100 in the ensuing trading sessions. Traders with short-term perspective can consider buying the stock with stop-loss at Rs 92.2 level.
( Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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