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We recommend a buy in the stock of Lumax Auto Technologies from a short-term horizon. It is seen from the charts of the stock that after finding support at around Rs 130 in this February and March, the stock reversed direction. Since then, it has been on a medium-term uptrend.
However, it encountered a significant medium-term resistance at Rs 180 in late June and started to move sideways in a narrow range between Rs 170 and Rs 180. On Wednesday, the stock broke out of this range bound movement by jumping four per cent with above average volumes. It is currently trading well above its 50- and 200-day moving averages.
The stock's medium-term uptrend line is in tact. Both daily as well as weekly relative strength indices have entered into the bullish zone from the neutral region. The daily moving average convergence divergence indicator has signalled a buy and is hovering in the positive territory implying upward momentum.
We are bullish on the stock from a short-term perspective. We anticipate it to rally further until it touches our price target of Rs 191 or Rs 196 in the approaching trading sessions. Traders with short-term perspective can consider buying the stock with stop-loss at Rs 179 levels.
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