We recommend a buy in the stock of Exide Industries from a short-term horizon. It is evident from the charts of the stock that after encountering significant resistance at around Rs 175 in July this year, the stock reversed its direction downwards. Since then, the stock has been on an intermediate-term downtrend. The stock's short-term downtrend that started from its December 7 peak of Rs 124 found support registering a 52-week low at Rs 98.7 on December 22. However, triggered by positive divergence in daily relative strength index and daily moving average convergence divergence, the stock changed its direction.
On Thursday, the stock surged 5.5 per cent with good volumes. The daily RSI has entered into the neutral region from the bearish zone whereas weekly RSI is hovering in the bearish zone. Both the daily and weekly price rate of change indicators are displaying positive divergence, backing the stock's change in direction. Taking a contrarian stance on the stock from a short-term perspective, we are bullish on it. We expect the stock to rally further and touch our price target of Rs 111 or Rs 114 in the ensuing trading sessions. Traders with a short-term perspective can consider buying the stock with stop-loss at Rs 104.