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We recommend a buy in the stock of Berger Paints India from a short-term perspective. It is seen from the charts of the stock that after bottoming out in February, the stock has been on an intermediate-term uptrend. However, after encountering resistance at around Rs 111 in June, the stock started to consolidate sideways in the broad range between Rs 96 and Rs 111.
Last week, after testing its lower boundary, the stock did a volte-face, forming a bullish engulfing candlestick pattern and taking support from its 200-day moving average. On Tuesday, the stock jumped three per cent accompanied by above-average volumes, breaching its 21- and 50-day moving averages.
Both daily and weekly relative strength indices are rising higher in the neutral region towards the bullish zone. Weekly moving average convergence divergence indicator is featuring in the positive territory. We are bullish on the stock from a short-term perspective.
We expect the stock's up-move to prolong and touch our price target of Rs 108 or Rs 111 in the forthcoming trading sessions. Short-term traders can consider buying the stock with stop-loss at Rs 101.5.
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