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We recommend a ‘buy' in the stock of Jaypee Infratech from a short-term perspective. The stock zoomed 12 per cent in Wednesday's session on high volume. This move has also made the stock move beyond the short-term resistance at Rs 45.
The stock has been in a vicious downtrend since last October, etching lower peaks and troughs on the chart. However, it appears to have made a short-term trough at the recent low at Rs 36.1.
It is trading above its 21-day moving average since September 6 and managed to close above the 50-day moving average in the last session. Relative strength index on the daily chart moved well in to the positive zone while the rate of change oscillator also spiked higher. What is more interesting is that the stock broke out above the upper boundary of the Bollinger band on Wednesday.
Despite the stock appearing a trifle overbought from a short-term perspective, it has the potential to move up to Rs 47.75 or Rs 50.5 in the upcoming sessions. Traders can, therefore, buy the stock with stop at Rs 44.7.
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