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We recommend a buy in the stock of Jindal Saw from a short-term perspective. It is evident from the charts of the stock that after encountering significant resistance at Rs 225, the stock reversed its trend and started to decline. Since then it has been on an intermediate-term downtrend.
However, the stock found support at its long-term base level at around Rs 110 on August 26. Triggered by positive divergence in daily relative strength index and daily price rate of change indicator, the stock changed its direction. The stock has been on a nascent uptrend since last week.
On Monday, the stock jumped three per cent breaching its 21-day moving average. We observe that there is an increase in volumes over the past two trading sessions. The daily RSI has entered into the neutral region and weekly RSI is recovering from the oversold area.
Daily moving average convergence divergence indicator has signalled a buy. Moreover, daily price ROC has entered into the positive territory implying buying interest.
We are bullish on the stock from a short-term horizon. We expect its up move to prolong and hit our price target of Rs 128 or Rs 133 in the approaching trading sessions. Traders with short-term perspective can buy the stock while maintaining stop-loss at Rs 122 levels.
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