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We recommend a buy in the stock of JSW Energy from a short-term perspective. It is apparent from the charts of the stock that it has been on a medium-term uptrend since taking support at Rs 42 in late August this year. In late September, the stock decisively breached its key resistance at around Rs 56 and subsequently encountered resistance at Rs 64 in October.
Following a two-month sideways consolidation, the stock has breached its upper boundary by gaining 4.8 per cent on Monday. Moreover, this up move has breached the stock’s 21- and 50-day moving averages positioned around Rs 61. We notice that there is an increase in daily volume in the past two trading sessions. The daily relative strength index has entered the bullish zone from the neutral region and weekly RSI is also featuring in the bullish zone implying upward momentum.
Medium-term uptrend is in place. The daily moving average convergence divergence indicator is featuring in the positive territory and has signalled a buy. We are bullish on the stock from a short-term perspective. We expect its rally to continue and reach our price target of Rs 67.5 or Rs 69 in the ensuing trading sessions. Traders with short-term perspective can consider buying the stock with stop-loss at Rs 63.3 levels.
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