Today's Pick

Balkrishna Industries (Rs 128.1): Buy

Yoganand D | Updated on March 12, 2018


We recommend a buy in the stock of Balkrishna Industries from a short-term perspective. It is apparent from the charts of the stock that after bottoming out in March 2009 at a low of around Rs 25, it has been on a long-term uptrend. However, the stock encountered resistance at Rs 160 in November 2010, and started to decline. It was on a medium-term downtrend until it found support in the band between Rs 110 and Rs 115, a significant long-term support and bounced up in late January. Moreover, this key support coincides with the 38.2 per cent fibonacci retracement level of its prior up-move from March 2009 lows.

Triggered by the positive divergence displayed in the daily moving average convergence divergence as well as price rate of change indicators and cushioned by key support, the stock changed direction last month. The stock is on a short-term uptrend and appears to have resumed its long-term trend. The daily relative strength index is on the verge of entering into the bullish zone and weekly RSI is moving higher into the neutral region. Daily price rate of change indicator is featuring in the positive territory, indicating buying interest. We are bullish on the stock from a short-term perspective. We expect it to move higher until it hits our price target of Rs 132 or Rs 136 in the approaching trading sessions. Traders with a short-term perspective can consider buying the stock with stop-loss at Rs 125.

Published on February 21, 2011

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