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We recommend a buy in the stock of Jyoti Structures from a short-term perspective. It is seen from the charts of the stock that it had been on a medium-term downtrend from its January peak of Rs 140, until it found support at its long-term support level of Rs 75 in mid-March. However, the stock changed its direction from the support level, triggered by positive divergence in daily and weekly relative strength index. Since then, the stock has been gradually moving higher.
On May 27, the stock conclusively penetrated its medium-term downtrend-line by jumping more than four per cent. Reinforcing the bullish momentum, the stock advanced three per cent on Monday, breaching its 50-day moving average. We notice that there is an increase in volumes over the past three trading sessions. The daily RSI has entered in to the bullish zone from the neutral region and weekly RSI is on the verge of entering into the neutral region from the bearish zone. Daily moving average convergence divergence indicator has signalled a buy.
We are bullish on the stock from a short-term horizon. We expect it's up move to prolong until it hits our price target of Rs 86.5 or Rs 89.5 in the ensuing days. Short-term perspective traders can buy the stock with a stop-loss at Rs 81.5.
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