We recommend a buy in the stock of CEAT from a short-term horizon. It is seen from the charts of the stock that after marking a 52-week low at Rs 66 in December 2011, the stock made a turnaround. Since then, it has been on a medium-term uptrend. The stock's significant medium-term support at around Rs 82 cushioned its decline in late February and early March this year. Subsequently, the stock continued its up move and its short-term trend is also up.

On Wednesday, CEAT climbed three per cent penetrating its immediate resistance level at Rs 89. We observe that there is an increase in volume over the past four trading sessions. The stock is hovering well above its moving average compression (21-, 50- and 200-day moving averages) positioned around Rs 87. The daily relative strength index is featuring in the bullish zone and weekly RSI is moving higher in the neutral region towards the bullish zone.

The daily moving average convergence divergence indicator which is hovering in the positive territory has signalled a buy. The stock's medium-term uptrend-line is in tact. Our short-term outlook on the stock is bullish. We anticipate its up trend to carry on until it reaches our price target of Rs 96 or Rs 98.5 in the approaching trading sessions. Traders with short-term horizon can consider buying the stock with stop-loss at Rs 90.