We recommend a buy in the stock of Godawari Power & Ispat from a short-term perspective. It is apparent from the charts of the stock that after marking a 52-week low at Rs 69.9 on December 2011, the stock reversed its direction. Since then, the stock has been on a medium-term uptrend. Following a near-term corrective decline, the stock took support around Rs 100 in late February this year. This support level cushioned the stock during early and late March.

On Monday, the stock jumped six per cent with good volume, breaching its 21- as well as 50-day moving averages and immediate resistance at Rs 109. With this up move, the stock appears to have resumed its medium-term uptrend that is in place. The daily relative strength index is on the brink of entering into the bullish zone from the neutral region and weekly RSI is climbing higher in the neutral region.

The daily moving average convergence divergence indicator has signalled a buy and is featuring in the positive territory. Both daily and weekly price rate of change indicators are hovering in the positive terrain implying buying interest. We are bullish on the stock from a short-term perspective. We expect its up move to continue and touch our price target of Rs 115.5 or Rs 119 in the approaching trading sessions. Traders with short-term perspective can consider buying the stock with stop-loss at Rs 108.5.

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