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Investors with a short-term perspective can buy the stock of SRF. It is evident from the charts of the stock that it peaked out after registering an all time high at Rs 444 in early November last year. Since then it has been on an intermediate-term downtrend. However, the stock's decline got arrested and it took support at its long-term base band between Rs 270 and Rs 280 twice this year (in early February and late June) and bounced up.
It has been steadily trending higher since late June. While moving higher it breached its 21- and 50-day moving averages and is trading well above them. Further, the stock penetrated its intermediate-term downtrend line emphatically by jumping almost five per cent with heavy volumes on July 19. The daily relative strength index has entered into the bullish zone and weekly RSI is inching higher in the neutral region. Daily moving average convergence divergence indicator has signalled a buy and is featuring in the positive territory implying upward momentum.
Considering the stock's recent downtrend line penetration and strength in the indicators, we are bullish on it from a short-term perspective. We expect the stock's move to prolong until it hits our price target of Rs 331 or Rs 341 in the forthcoming trading sessions. Short-term traders can buy the stock with stop-loss at Rs 311.
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