We recommend a buy in the stock of Exide Industries from a short-term perspective . It is seen from the charts of the stock that since taking support at around Rs 100 in December 2011, it has been trending upwards forming higher peaks and troughs. However, after encountering resistance at Rs 166 in October 2012, the stock witnessed a corrective decline. Last month, this decline was arrested at Rs 136 — a key support level and also its 200-day moving average. Subsequently, the stock started to trend upwards backed by positive divergence in daily moving average convergence divergence indicator.
The stock has breached its 21- and 50-day moving averages by gaining 4 per cent in the past couple of trading sessions and is currently testing resistance. We notice that there is an increase in daily volume in the previous three trading sessions. The daily relative strength index has entered the bullish zone from the neutral region and weekly RSI is likely to enter this zone. The daily MACD has signalled a buy and is on the brink of entering positive territory. Both daily and weekly price rate of change indicators are featuring in the positive terrain implying buying interest.
We are bullish on the stock from a short-term perspective. We anticipate it to breach its resistance and reach our price target of Rs 154.5 or Rs 157.5 in the upcoming trading sessions. Traders with short-term perspective can buy the stock with stop-loss at Rs 145.
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