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We recommend a buy in the stock of Essar Ports from a short-term perspective. It is evident from the charts of the stock that after encountering significant long-term resistance in the band between Rs 120 and Rs 125 in early June, the stock started to decline. It was on a medium-term downtrend until it found support in early October at around Rs 51, which is a key long-term support.
However, the stock subsequently changed its direction triggered by positive divergence in daily moving average convergence divergence indicator. On October 24, the stock surged four per cent breaching its 21-day moving average conclusively. We observe that there is an increase in volumes over the past four trading sessions.
The daily relative strength index is inching higher in the neutral region towards the bullish zone and weekly RSI is recovering from the oversold territory. Daily MACD has signalled a buy and is trending higher in line with the stock's price. Daily price rate of change indicator is featuring in the positive area implying buying interest.
We are bullish on the stock from a short-term perspective. We expect the stock to move higher and reach our price target of Rs 63 or Rs 65 in the ensuing trading sessions. Traders with short-term perspective can buy the stock with stop-loss at Rs 59.
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