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We recommend a buy in the stock of Andhra Sugars from a short-term horizon. It is seen from the charts of the stock that after finding support at around Rs 85 in March this year, the stock reversed its direction triggered by positive divergence in daily indicators. Since then, the stock has been trending northwards.
On Tuesday, the stock jumped more than three per cent breaking through its key medium-term resistance at Rs 110. There is an increase in daily volumes over the past three trading sessions. The stock is trading way above its 50- and 200-day moving averages.
The daily relative strength index is featuring in the bullish zone and weekly RSI has entered in to this zone from the neutral region. Both daily and weekly moving average convergence divergence indicators are rising in line with the stock price.
Daily as well as weekly price rate of change indicators are featuring in the positive territory denoting buying interest. Medium-term trend is up for the stock since June. Our short-term outlook on the stock is bullish. We expect its up move to continue until it reaches our price target of Rs 114.5 or Rs 118.5 in the ensuing trading sessions. Traders with short-term perspective can buy the stock with stop-loss at Rs 109.
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