We recommend a buy in the stock of Ambuja Cements from a short-term perspective. It is apparent from the charts of the stock that after encountering significant long-term resistance at around Rs 160 in late April this year, it started to trend downwards. The stock was on a medium-term downtrend until it found support at around Rs 120 in early July, which is a key long-term base level.

Subsequently, the it reversed direction triggered by positive divergence in the daily moving average convergence indicator. Since then, the stock has been on a short-term uptrend. In early August, the stock rebounded taking support from Rs 120. On Thursday, the it advanced almost three per cent, breaching its immediate resistance around Rs 133 and its 200-day moving average.

The stock is trading well above its 21- and 50-day moving averages. The 14-day relative strength index has entered into the bullish zone and weekly RSI is rising towards this zone in the neutral region. Daily MACD is moving in line with the stock price and is featuring in the positive territory. Daily and weekly price rate of change indicators are hovering in the positive territory implying buying interest. We are bullish on the stock from a short-term perspective. We expect it to rally and reach our price target of Rs 140 or Rs 144 in the forthcoming trading sessions. Traders with short-term perspective can buy the stock with stop-loss at Rs 132.

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