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We recommend a buy on the stock of Finolex Cables from a short-term perspective. It is apparent from the charts of the stock that it has been on a long-term uptrend ever since bottoming out in November 2011 at Rs 21. In late March, the stock took support at its long-term base level around Rs 42 and continued to trend northwards. Since then, it has been on a short- to medium-term uptrend. The stock decisively, breached its moving average compression (21-, 50- and 200-day moving average) at around Rs 48 in late April and is hovering well above them.
On Thursday, the stock gained 7.6 per cent breaking through its immediate resistance at Rs 53. The daily relative strength index has entered the bullish zone from the neutral region and weekly RSI is climbing higher in the neutral region. Both daily and weekly moving average convergence divergence indicators are featuring in the positive territory indicating upward momentum.
We are bullish on the stock from a short-term perspective. We anticipate its rally to continue and reach our price target of Rs 58 or Rs 59 in the sessions ahead. Traders with short-term perspective can consider buying the stock with stop-loss at Rs 54.4 levels.
( Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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