We recommend a buy in the stock of Bajaj Electricals from a short-term perspective. It is evident from the charts of the stock that in December 2011, it took support from a long-term base band between Rs 130 and Rs 135 and reversed its direction. Since then the stock has been on a medium-term uptrend. After testing resistance at Rs 179 in early February, the stock witnessed a minor corrective decline.

The stock resumed its uptrend taking support at Rs 170 where 21-day moving average is also positioned. On Tuesday, the stock breached the aforesaid resistance by gaining 2.4 per cent. There is an increase in volumes over the past three trading sessions. The daily relative strength index is hovering in the bullish zone and weekly RSI is moving higher in the neutral region. The daily moving average convergence divergence indicator has been inching higher in line with the stock price from December and it has given a buy signal.

The daily price rate of change indicator is featuring in the positive terrain and weekly price rate of change has entered into this zone implying buying interest. Medium-term uptrend-line is intact for the stock. We expect its northward journey to prolong and reach our price target of Rs 187.5 or Rs 193 in the upcoming trading sessions. Traders with short-term perspective can consider buying the stock with stop-loss at Rs 176.5.

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