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Investors with short-term perspective can consider buying the stock of Adani Power. It is visible from the charts of the stock that since encountering resistance at around Rs 144 in November 2010, the stock has been on an intermediate-term downtrend. It emphatically broke through its key medium-term support at around Rs 107 in late July this year and accelerated downwards.
However, after recording a life-time low at Rs 82.7 on August 19, the stock halted its downtrend. Then triggered by positive divergence in daily relative strength index and daily price rate of change indicator, the stock reversed its trend and jumped six per cent with above average volume on Tuesday. Both daily and weekly RSI are recovering from the oversold territory.
Daily as well as weekly moving average convergence divergence indicators are hovering in the oversold area signalling that reversal could be on the way. Taking a contrarian view on the stock, we are positive on it from a short-term perspective. We anticipate Adani Power stock to rally until it touches our price target of Rs 92 or Rs 95 in the upcoming trading sessions. Traders with short-term perspective can buy the stock with stop-loss at Rs 87.
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