We recommend a buy in the stock of Jyothy Laboratories from a short-term perspective. It is apparent from the charts of the stock that it has been on a long-term uptrend from its November 2011 low of Rs 62.5. In February 2013, the stock took support at around Rs 140 and continued its long-term uptrend. Since then, it has been on a medium-term uptrend. After a minor correction, the stock took twin support (up trend line and key support) at around Rs 170 in the previous week and bounced upwards. On Thursday, the stock jumped 6.7 per cent with good volume. We notice the formation of a hammer pattern in the weekly chart, indicating bullish reversal. The daily as well as the weekly relative strength indices are featuring in the neutral region. Considering that the stock’s medium-term uptrend is in tact and the formation of bullish reversal candlestick pattern at support level we are optimistic on the stock from a short-term perspective. We expect the stock’s rally to continue and reach our price target of Rs 192.5 or Rs 196.5 in the forthcoming trading sessions. Traders with short-term perspective can consider buying the stock with stop-loss at Rs 181.5 level.

(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)

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