Today's Pick

Century Enka (Rs 121.1): BUY

| Updated on: Jul 11, 2012
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We recommend a buy in the stock of Century Enka from a short-term horizon. It is evident from the charts of the stock that ever since bottoming out in December 2011 low at Rs 88.5, it has been on a modest medium-term uptrend. Taking support at the stock's key long-term base at Rs 105 during mid-May and June this year, it started to move higher. Near-term trend is up for the stock. The stock emphatically broke through its significant medium-term resistance at Rs 118 by jumping 6.6 per cent with an upward gap on Wednesday. As the gap occurred with extraordinary volumes, we name it a breakaway gap.

Moreover, the stock has breached its 200-day moving average poised around Rs 118. The daily relative strength index is featuring in the bullish zone and weekly RSI moving higher in the neutral region towards the bullish zone. Both daily and weekly moving average convergence divergence are inching higher in line with the stock price implying upward momentum. The daily as well as weekly price rate of change indictors are hovering in the positive terrain indicating buying interest.

We are bullish on the stock from a short-tem perspective. We anticipate its up move to prolong and touch our price target of Rs 125 or Rs 129 in the upcoming trading sessions. Traders with short-term perspective can buy the stock with stop at Rs 117.5.

Published on July 11, 2012

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