We recommend a buy in the stock of JK Tyre & Industries from a short-term horizon. It is apparent from the charts of the stock that it has been on an intermediate-term uptrend from its November 2011 low of Rs 53. Medium-term trend is also up for the stock. Following a two-month sideways consolidation between Rs 106 and Rs 116, the stock decisively broke out of the range by gaining 10.7 per cent on Monday with extraordinary volume.

Moreover, the stock has breached its long-term resistance at around Rs 116, reinforcing the bullish momentum. It is hovering well above its 21- and 50-day moving averages. The daily relative strength index has entered the bullish zone and weekly RSI has re-entered the bullish zone from the neutral region. The daily moving average convergence divergence indicator has signalled a buy and is featuring in the positive territory.

The weekly MACD is moving higher in line with the stock price. Both daily and weekly price rate of change indicators are hovering in the positive area implying buying interest. We are bullish on the stock from the short-term perspective. We expect its rally to continue and reach our price target of Rs 125 or Rs 127 in the upcoming trading sessions. Traders with short-term perspective can buy the stock with stop-loss at Rs 117 levels.

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