We recommend a buy in the stock of Atul from a short-term perspective. It is seen from the charts of the stock that after finding support at Rs 135 in late December 2011, it bottomed out. The stock started to trend higher and has been on an intermediate-term uptrend since then. Moreover, the stock has resumed its long-term uptrend that has been in place from early 2009 low of Rs 34. In early May this year, the stock took support around Rs 188 (its 200-day moving average also cushioned around that level) and continued its upward journey. The stock was struggling to surpass a key resistance around Rs 200 over past three weeks.
On Tuesday, it jumped five per cent with above average volume breaking out of the significant resistance level at Rs 200. It is hovering well above both 21- and 50-day moving averages. Both daily and weekly relative strength indices have entered the bullish zone from the neutral region. The daily as well as moving average convergence divergence indicators are inching higher in line with the stock price in the positive terrain implying upward momentum. The stock's intermediate-term uptrendline is intact. Our short-term forecast on the stock is bullish. We anticipate the stock's up move to carry on and touch our price target of Rs 216 or Rs 222 in the approaching trading sessions. Traders with short-term perspective can consider buying the stock with stop-loss at Rs 202.5.