Investors with short-term perspective can consider buying the stock of Ceat. It is seen from the charts of the stock that after peaking out in September 2010, it started to decline. In January 2011, the stock conclusively penetrated its key support and was on a medium-term downtrend until it found support in the range between Rs 85 and 90 in early February. However, the stock changed direction subsequently and has been on a short-term uptrend since then.

The stock jumped almost eight per cent accompanied by heavy volumes on Monday, reinforcing its short-term uptrend. Moreover, the stock has breached its 21-day moving average showing initial signs of bullishness. Daily relative strength index is about to enter the bullish zone from the neutral region and weekly RSI is on the verge of entering the neutral region from the bearish zone. The daily price rate of change indicator has entered the positive territory implying buying interest. We are bullish on the stock from short-term perspective.

We expect the stock to rally further until it hits our price target of Rs 108.5 or Rs 112 in the forthcoming trading session. Short-term perspective traders can buy the stock with stop-loss at Rs 102 levels.

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