Investors with short-term perspective can consider buying the stock of Essar Oil. It is apparent from the charts of the stock that it has been in a medium-term uptrend from its August 2012 low of Rs 46, forming higher peaks and troughs. After taking support at around Rs 68 in mid-December 2012, the stock resumed its uptrend. Since then, the stock has been in a short-term uptrend as well.

On Thursday, it surged 5 per cent breaking through a key resistance at Rs 73. It is hovering well above its 21- and 50-day moving averages. We notice that there is an increase in daily volumes in the past three trading sessions. Both daily and weekly relative strength indices are featuring in the bullish zone. Likewise, the daily as well as weekly price rate of change indicators are hovering in the positive territory, implying buying interest. The daily moving average convergence divergence indicator has signalled a buy.

Our short-term outlook for the stock is bullish. We expect its rally to continue and hit our price target of Rs 80 or Rs 81.5 in the ensuing trading sessions, while maintaining stop-loss at Rs 75.3 levels.