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We recommend a buy in KEC International from a short-term trading perspective. The stock bottomed at Rs 31 on December 21, 2011, and is in a medium-term uptrend since then. This trough was formed after a sustained down-move since February 2010. That it bounced off the long-term support around Rs 34 also leads to the possibility that the stock could continue to move higher.
The relative strength index in the daily chart has moved into the overbought region but there is no reversal in this indicator yet. The weekly relative strength index has just moved into the bullish zone. The rate of change oscillator in the weekly chart is also making progress above the zero line underlining the strength in this rally.
Investors can buy the stock with stop at Rs 59.5. It can move on to Rs 63.2 or Rs 66 in the upcoming sessions.
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