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We recommend a buy in the stock of Century Textiles and Industries from a short-term perspective. It is apparent from the charts of the stock that after encountering long-term resistance at Rs 450 in early January, it has been on a medium-term downtrend. However, the stock's long-term support in the zone between Rs 260 and Rs 270 arrested this downtrend recently. Triggered by positive divergence in daily relative strength index and price rate of change indicator, the stock reversed direction.
On Tuesday, it gained more than 3 per cent accompanied by above-average volume, surpassing its near-term resistance as well as 21-day moving average at around Rs 286. The daily price ROC has entered the positive terrain indicating buying interest.
Taking a contrarian stance on the stock, we are bullish on it from a short-term perspective. We expect its up-move to continue and reach our price target of Rs 304 or Rs 310 in the upcoming trading sessions. Traders with a short-term perspective can consider buying the stock with stop-loss at Rs 286 level.
( Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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