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We recommend a buy in the stock of Crompton Greaves from a short-term perspective. It is apparent from the charts of the stock that it was on a short-term sideways consolidation in the band between Rs 88 and Rs 100 from late February 2013. On Friday, the stock jumped 9 per cent with extraordinary volume, breaking out of the aforesaid sideways consolidation band. The stock is hovering well above its 21- and 50-day moving averages. The daily relative strength index is featuring in the bullish zone and the weekly RSI is moving higher in the neutral region. The daily moving average convergence divergence indicator is moving higher in line with stock and is hovering in the positive territory indicating upward momentum. Both the daily and the weekly price rate of change indicators are hovering in the positive terrain implying buying interest. We are bullish on the stock from a short-term perspective. We expect the stock’s up move to continue and reach our price target of Rs 110.5 or Rs 112.5 in the forthcoming trading sessions. Traders with short-term perspective can consider buying the stock with stop-loss at Rs 103.5 level.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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