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We recommend a buy in the stock of ITC from a short-term perspective. It is evident from the charts of the stock that it has been on a long-term uptrend since its 2008 low at Rs 66. In March this year, the stock emphatically breached its key resistance at Rs 215 and started trending upwards. However, after registering a new high at Rs 299 in October, the stock started to witness a corrective decline.
Following a 50 per cent fibonacci retracement of the stock's prior up move, it found support at Rs 275. Its 50-day moving average also provided base around this level. On Monday, the stock advanced 2.7 per cent with above average volume, reversing higher from the aforesaid support. The daily relative strength index has rebounded up from 40 levels and weekly RSI is on the brink of re-entering the bullish zone from the neural region.
Considering that the stock's medium-term uptrend is intact, we are bullish on it from a short-term perspective. We anticipate its up move to continue and reach our price target of Rs 288 or Rs 293.5 in the upcoming trading sessions. Traders with short-term perspective can consider buying the stock with stop-loss at Rs 279 levels.
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