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We recommend a buy in the stock of Godrej Industries from a short-term perspective. It is evident from the charts of the stock that after testing the significant resistance between?Rs 235 and Rs 245 in?November, it started to decline. Since then the stock was on a medium-term downtrend until it found support around Rs 155 in early February 2011. The stock then changed direction, triggered by positive divergence in daily moving average convergence divergence and weekly price rate of change indicator.
It has been on a modest uptrend from February trough. On March 23, the stock penetrated its medium-term downtrend line as well as 21-day moving average by gaining three per cent. We observe that there is an increase in daily volumes in the last two sessions. Both daily as well as weekly relative strength indices are heading towards the bullish zone. The daily MACD has signalled a buy and is likely to enter in to the positive territory.
We are bullish on Godrej Industries from a short-term perspective. We anticipate it to move higher until it reaches our price target of Rs 176.5 or Rs 182 in the ensuing days. Traders with short-term perspective can consider buying the stock with stop-loss at Rs 167 levels.
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