We recommend a buy in the stock of Gujarat Mineral Development Corporation from a short-term perspective. It is evident from the charts of the stock that it has been on an intermediate-term downtrend ever since encountering key resistance at Rs 220 in early January. While trending down, the stock breached important supports at Rs 160 and Rs 140 and continued to decline.
Marking a 52-week low at Rs 76 on August 2, the stock halted his downtrend. Subsequently, the stock began to reverse direction triggered by positive divergence in daily relative strength index. Moreover, weekly indicators are featuring in the deep oversold territory implying a near-term correction. Last session, the stock gained 9 per cent strengthening near-term bullish momentum.
As the stock is reversing higher triggered by positive divergence, we are bullish on it from a short-term horizon. We expect its up move to continue and knock our price target of Rs 91.5 or Rs 93.5 in the approaching trading sessions. Traders with short-term perspective can buy the stock with stop-loss at Rs 85.6 level.
( Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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