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We recommend a buy in the stock of Polaris Financial Technology from a short-term perspective. It is apparent from the charts of the stock that after taking long-term support in the band between Rs 105 and Rs 115 in May and July this year, the stock was on a medium-term uptrend. However, the stock encountered resistance at around Rs 140 in September and declined to its long-term support band mentioned above.
Cushioned by the stock's long-term support and triggered by positive divergence in daily relative strength index as well as price rate of change indicator, the stock started to move higher once again. On Tuesday, the stock jumped 8 per cent with extraordinary volume breaching its downtrend line. The daily RSI is on the brink of entering bullish zone and weekly RSI is moving higher in the neutral region. The daily moving average convergence divergence indicator has signalled a buy.
As the stock is reversing higher from a key support, we are bullish on it from a short-term perspective. We expect its rally to prolong and reach our price target of Rs 129 or Rs 132 in the approaching trading sessions. Traders with short-term perspective can buy the stock with stop-loss at Rs 121.5 levels.
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