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We recommend a buy in the stock of Autoline Industries from a short-term perspective. It is apparent from the charts of the stock that after registering a 52-week low at Rs 69.5 in late November 2011, the stock bottomed out. Since then, the stock has been on a medium-term uptrend. While trending higher, the stock breached its 21- and 50-day moving averages in the previous week and is trading well above them.
On Tuesday, the stock emphatically broke through twin resistances, an intermediate-term downtrend line as well as key resistance at around Rs 128, by jumping seven per cent. Moreover, the stock has closed above its 200-day moving average. We notice that the stock's current up move is backed by good volume during the sessions when the stock advanced. The daily relative strength index is featuring in the bullish zone and weekly RSI is likely to enter this zone from the neutral region.
The daily moving average convergence divergence indicator is moving higher in line with stock price and is hovering in the positive territory. Our short-term outlook on the stock is bullish. We anticipate its up move to prolong and touch our price target of Rs 137 or Rs 141 in the forthcoming trading sessions. Traders with short-term perspective can consider buying the stock with stop-loss at Rs 128.5.
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