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We recommend a buy in the stock of Global Offshore Services from a short-term perspective. It is evident from the charts of the stock that since peaking out in January 2010 at the high of Rs 230, the stock has been on a long-term downtrend. Intermediate-term trend is also down in the stock. But, it found support around Rs 63 in early December 2011 and reversed its direction triggered by positive divergence in daily moving average convergence indicator and weekly relative strength index.
The stock is moving sideways with an upward bias since December 2011, forming an ascending triangle pattern with horizontal line around Rs 78. It is a bottom reversal pattern in this scenario. The stock is hovering well above its 21- and 50-day moving averages. On February 16, the stock rose seven per cent with above average volume and is testing the horizontal line of the pattern. The daily RSI is featuring in the bullish zone and weekly RSI is moving higher in the neutral region.
The daily MACD is trending northwards in line with the stock price and has signalled a buy. Both daily as well as 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 the stock to breach the horizontal line and reach our price target of Rs 81 or Rs 83 in the ensuing trading sessions. Traders with short-term perspective can consider buying the stock with stop-loss at Rs 76.
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