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We recommend a buy in the stock of Phillips Carbon Black from a short-term perspective. It is apparent from the charts of the stock that from its September 2010 peak of Rs 242, it has been on an intermediate-term downtrend. Nevertheless, the stock's key long-term support zone between Rs 115 and Rs 125 arrested its downtrend in early February. Since then, the stock has been trending higher. On March 31, the stock emphatically penetrated its downtrend-line as well as its 21- and 50-day moving averages by jumping seven per cent accompanied by good volumes. With this surge, the daily relative strength index has entered into the bullish zone from the neutral region and weekly RSI has entered in the neutral region from the bearish zone.
Daily moving average convergence divergence indicator has signalled a buy and is on the brink of entering the positive territory. Price rate of change indicator is featuring in the positive terrain indicating buying interest. Our short-term outlook on the stock is bullish.
We expect its current rally to prolong until it hits our price target of Rs 149 or Rs 154 in the approaching trading session. Traders with short-term perspective can consider buying the stock with stop-loss at Rs 140.5.
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