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We recommend a buy in the stock of Great Offshore from a short-term perspective. It is seen from the charts of the stock that it has been on a long-term downtrend since the peak formed at Rs 580 in December 2009. Moreover, medium- and short-term trends are also down for the stock.
However, following a steep decline from Rs 145, the stock registered its 52-week low at Rs 108.5 on October 25 and is finding support around this level. On Wednesday, the stock bounced up four per cent accompanied by above average volumes, triggered by positive divergence in daily relative strength index as well as daily moving average convergence divergence indicators.
Further, weekly RSI and MACD are also displaying prolonged positive divergence indicating possibility of trend reversal in the stock. Daily RSI is inching higher in the bearish zone towards the neutral region and weekly RSI is recovering from the oversold territory.
Taking a contrarian stance on the stock we are bullish on it from a short-term perspective. We expect the stock to move higher and reach our price target of Rs 118 or Rs 121 in the upcoming days. Traders with short-term perspective can buy the stock with stop-loss at Rs 111.
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