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Investors with high risk appetite can consider buying the stock of Ess Dee Aluminium at current levels. Following an intermediate-term downtrend from the February 2014 peak of ₹769, the stock found support in the band between ₹120 and ₹130 in March 2015. This long-term support band provided a base and arrested the stock’s downtrend. Subsequently, it changed direction, triggered by positive divergence in the daily relative strength index and the moving average convergence divergence indicator.
On Monday, the stock jumped 9 per cent with good volume, decisively breaching its 21- and 50-day moving averages. The daily price rate of change and moving average convergence divergence indicators have entered the positive territory reinforcing the bullish momentum. The stock has the potential to continue its rally and reach the price target ₹306.5 and ₹312.5 in the forthcoming trading sessions. Buy the stock with a stop-loss at ₹288.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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