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We recommend a buy in the stock of Sasken Communication Technologies from a short-term perspective. It is seen from the charts of the stock that since last October's peak of Rs 237, it has been trending downwards. In early July this year, the stock encountered resistance at around Rs 150 and fell steeply resuming its downtrend. However, it found support in mid of August at around Rs 95 which is a key level from a long-term perspective.
Triggered by positive divergence in daily relative strength index, the stock subsequently changed its direction. Since then, it has been on a nascent uptrend. On Thursday, the stock rose 3.5 per cent accompanied by good volumes; it conclusively penetrated its 21- and 50-day moving averages. Daily RSI has entered into the bullish zone and weekly RSI is on the brink of entering into the neutral region from the bearish zone.
Further, daily moving average convergence divergence indicator is about to enter into positive territory implying upward momentum. We are bullish on the stock from a short-term perspective. We expect its uptrend to continue and reach our price target of Rs 114 or Rs 118.5 in the upcoming trading sessions. Traders with short-term horizon can buy the stock with stop-loss at Rs 108.5.
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