We recommend a buy in the stock of Kalyani Steels from a short-term horizon. It is seen from the charts of the stock that in December 2011, it changed trend forming a trough at Rs 32, helped by positive divergence in weekly indicators. Since then, the stock has been on a medium-term uptrend. After retracing 50 per cent Fibonacci retracement level of the uptrend, the stock found support in the band between Rs 49 and Rs 51 in recent times. Subsequently, it started moving higher.

On Tuesday, the stock jumped three per cent, conclusively breaching its short-term downtrendline as well as 200-day moving average poised around Rs 53. We observe that there is an increase in daily volumes over the past three trading sessions.

The daily moving average convergence divergence indicator has signalled a buy. Our short-term outlook on the stock is bullish. We expect its up move to continue and touch our price target of Rs 58.5 or Rs 60 in the forthcoming treading sessions. Traders with short-term horizon can consider buying the stock with stop-loss at Rs 55.

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