We recommend a buy in the stock of Asahi India Glass from a short-term perspective. It is evident from the charts of the stock that since bottoming out in March 2009 after touching a low of Rs 33, the stock has been on a long-term uptrend forming higher peaks and troughs.

However, following a minor corrective decline from its November 2010 peak, the stock found support at Rs 88 in December and bounced up.

The stock recently took support from this short-term base of Rs 88 and bounced up again, triggered by the positive divergence displayed in the daily moving average convergence divergence indicator.

Moreover, long-term uptrend-line is in tact and also provides support for the stock at Rs 88. In the past two trading sessions, the stock gained 5.8 per cent, forming a bullish engulfing candlestick pattern in the weekly chart that signals trend reversal.

Both the daily and weekly relative strength indices are inching higher in the neutral region towards the bullish zone.

Daily MACD has signalled a buy and is heading towards the positive territory whereas weekly MACD is featuring in this territory.

We are bullish on the stock from a short-term perspective. We anticipate it to continue climbing higher until it reaches our price target of Rs 100 or Rs 102.

Traders with short term perspective can consider buying the stock with stop-loss at Rs 92.

(The analysis and opinion expressed in these columns are based on the technical analysis of the past price behaviour. The stop-loss level provided with the recommendation is important. The original view would stand negated if the stop-loss level is breached. There is a risk of loss in trading.)

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