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We recommend a buy in the stock of Bharati Shipyard from a short-term perspective. It is evident from the charts of the stock that it has been on an intermediate-term downtrend since its October 2010 peak of Rs 293. The stock's medium-term downtrend that started from its April peak of Rs 185, however, found support at around Rs 120 last month. Triggered by positive divergence in daily and weekly moving average convergence divergence indicators, the stock subsequently changed direction and started a nascent uptrend.
On Tuesday, the stock jumped five per cent emphatically breaking out of a significant medium-term resistance level of Rs 133. We observe that there has been an increase in volumes over the past three trading sessions. The stock's daily relative strength index is on the brink of entering in to the bullish zone from the neutral region and weekly RSI is about to enter the neutral region from the bearish zone. Daily MACD has signalled a buy and is heading northwards.
We are bullish on the stock from a short-term perspective. We anticipate the stock to move higher and touch our short-term price target of Rs 142 or Rs 146 in the days ahead. Traders with short-term perspective can consider buying the stock with stop-loss at Rs 133.5.
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