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We recommend a buy in the stock of Jindal Saw from a short-term perspective. It is apparent from the charts of the stock that following an intermediate-term downtrend from its March peak of Rs 180, the stock found significant long-term support at Rs 110 in late October this year. Subsequently, the stock changed direction triggered by positive divergence in daily moving average convergence divergence and price rate of change indicator. Since then, the stock has been in a short-term uptrend. However, after a minor correction, the stock took support at Rs 120 and bounced up by 3.8 per cent accompanied by above average volume.
The stock is hovering above its 21- and 50-day moving averages. Both daily as well as weekly relative strength indices are moving higher in the neutral region towards the bullish zone. As the stock is reversing upwards from a key support level and short-term uptrend is intact, we are bullish on the stock from a short-term perspective. We anticipate its rally to prolong and reach our price target of Rs 133 or Rs 136 in the forthcoming trading sessions. Traders with short-term perspective can consider buying the stock while maintaining stop-loss at Rs 125.2 levels.
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