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We recommend a buy in the stock of Bajaj Electricals from a short-term horizon. It is seen from the charts of the stock that after taking support at its long-term base band between Rs 130 and Rs 135 in December 2011, the stock changed its trend helped by positive divergence in weekly moving average convergence divergence indicator. The stock has been on a medium-term uptrend since then. Following a sideways movement between Rs 180 and Rs 192, the stock breached the upper boundary by surging 6.5 per cent with good volume on Wednesday.
The stock's recent up move has emphatically breached its 21- and 50-day moving averages. The daily relative strength index has entered the bullish zone from the neutral region. The weekly RSI too is inching higher in the neutral region towards the bullish zone. The daily price rate of change indicator has entered the positive terrain signalling buying interest.
Our short-term outlook on the stock is bullish. We anticipate its up move to be maintained and touch our price target of Rs 200 or Rs 206 in the forthcoming trading sessions. Traders with short-term perspective can consider buying the stock with stop-loss at Rs 188.5.
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