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Investors with short-term perspective can consider buying the stock of JK Tyre & Industries. It is apparent from the charts of the stock that following a short-term downtrend from its late May peak of Rs 125, the stock found support at Rs 100 last week. Triggered by positive divergence in daily relative strength index and price rate of change indicator, the stock reversed direction.
On Thursday, the stock zoomed 9 per cent accompanied by above average volume. This up-move has conclusively breached the stock’s immediate key resistance at Rs 105 and 21-day moving average. The daily RSI has entered the neutral region from the bearish zone and weekly RSI is featuring in the neutral region. The daily price rate of change indicator has entered the positive territory implying buying interest. The daily moving average convergence divergence indicator has signalled a buy.
As the stock is reversing higher from a key support backed by positive divergence we are bullish on it from a short-term perspective. We expect its rally to sustain and reach our price target of Rs 114.5 or Rs 117 in the forthcoming trading sessions. Traders with short-term perspective can consider buying the stock with stop-loss at Rs 108 level.
Yoganand D.
BL Research Bureau
( Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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