We recommend a buy in the stock of Eros International Media from a short-term perspective. It is evident from the charts of the stock that from an October 2011 peak of Rs 277, it has been on an intermediate-term downtrend, forming lower peaks and troughs. Its medium-term downtrend, which has been in place from the February 2012 peak of Rs 230, appears to have come to an end last week. The stock recently found support around Rs 160 and changed trend, triggered by positive divergence in daily relative strength index and price rate of change indicator.

On Thursday, the stock jumped 5.7 per cent with above average volume penetrating its medium-term downtrendline emphatically. This up move has breached the stock's 21-day moving average. The daily RSI is about to enter the bullish zone from the neutral region and weekly RSI has entered the neutral region from the bearish zone. The daily moving average convergence divergence indicator has signalled a buy and is moving higher in line with the stock price. From a short-term perspective we are bullish on the stock. We anticipate its up move to prolong and reach our price target of Rs 180.5 or Rs 186 in the forthcoming trading sessions. Traders with short-term perspective can consider buying the stock with stop-loss at Rs 170.