We recommend a buy in the stock of CEAT from a short-term horizon. It is apparent from the charts of the stock that after marking a 52-week low at Rs 66 in late December 2011, the stock reversed direction. Since then, the stock has been in an intermediate-term uptrend. In early June the stock took support at Rs 90 and continued to move upwards. Medium-term trend has been up for the stock since then.

On Thursday, the stock jumped more than 10 per cent accompanied by extraordinary volume, breaching its key resistance at Rs 103, which it has been testing from late June 2012. The stock is hovering well above its 50- and 200-day moving averages. Both daily and weekly relative strength index are featuring in the bullish zone. The daily moving average convergence divergence indicator is moving higher in line with the stock price in positive territory. The weekly MACD is also hovering in the positive territory implying upward momentum.

The daily as well as weekly price rate of change indicators are featuring in the positive terrain indicating buying interest. The stock's intermediate-term uptrendline is in tact. Our short-term outlook is bullish. We anticipate its up move to prolong and reach our price target of Rs 115.5 or Rs 119 in the forthcoming trading sessions. Traders with short-term perspective can consider buying the stock with stop-loss at Rs 108.5.

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