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We recommend a buy in the stock of Bharati Shipyard from a short-term perspective. It is seen from the charts of the stock that it has been on a long-term downtrend from its January 2010 peak of Rs 352. Both intermediate- and medium-term trends are down for the stock. However, the stock changed its direction triggered by positive divergence in weekly relative strength index and weekly moving average convergence divergence indicator, after hitting a 52-week low at Rs 65 on December 22.
Reinforcing the near-term bullish momentum, the stock surged almost six per cent accompanied by heavy volume on December 27. The 14-day RSI is on the brink of entering into the bullish zone and weekly RSI is recovering from the oversold territory. The daily stochastic oscillator is recovering from the oversold terrain.
Taking a contrarian stance on the stock from a short-term perspective, we are bullish on the stock. We anticipate the stock to move higher and knock our price target of Rs 75 or Rs 77 in the approaching trading sessions. Traders with short-term perspective can consider buying the stock with stop-loss at Rs 70.5 levels.
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