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We recommend a buy in the stock of Bajaj Electricals from a short-term perspective. It is apparent from the charts of the stock that it has been on a medium-term uptrend ever since taking support from its long-term base around Rs 130 in late December 2011. The stock subsequently, started trending higher and appears to have resumed its medium-term uptrend.
On Monday, the stock surged 3.5 per cent with above average volumes, penetrating a key resistance at Rs 200. This up move has conclusively breached its 21-day moving average and is hovering well above 200-day moving average. The daily relative strength index has entered into the bullish zone from the neutral region and weekly RSI is inching upwards in the neutral region. The daily moving average convergence divergence indicator has signalled a buy and is featuring in the positive territory.
The stock's daily price rate of change indicator has entered into the positive area indicating buying interest. We are bullish on the stock from a short-term perspective. We anticipate its uptrend to continue and reach our price target of Rs 213 or Rs 220 in the forthcoming trading sessions. Traders with short-term perspective can buy the stock with stop-loss at Rs 201.
Following a near-term corrective decline, the stock found support at its 200-day moving average positioned around Rs 183 in the previous week. The weekly MACD is moving in line with the stock price and has entered in the positive territory implying upward momentum.
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