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We recommend a buy in the stock of Indiabulls Financial Services from a short-term perspective. It is seen from the charts of the stock that it has been on an intermediate-term uptrend since its November 2011 low of Rs 116. However, after hitting a key resistance at Rs 236 in mid-February, the stock started to move sideways, forming an ascending triangle pattern. This is a bullish continuation pattern. Last week, the stock breached its 21- and 50-day moving averages emphatically and is hovering well above them.
On Monday, the stock surged four per cent with good volumes, penetrating the significant resistance at Rs 236 as well as the horizontal line of the ascending triangle pattern.
Both the daily and weekly relative strength index are featuring in the bullish zone. The daily moving average convergence divergence indicator has signalled a buy and is hovering in positive terrain along with the weekly indicator. We are bullish on the stock from a short-term horizon. We expect the stock's up move to continue and touch our price target of Rs 250 or Rs 257 in the ensuing trading sessions. Traders with a short-term perspective can consider buying the stock with stop-loss at Rs 235.
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