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The stock of Kennametal India gained 4.6 per cent, rebounding from a key support at ₹840 on Wednesday. Investors with a short-term horizon can buy the stock at current levels. The stock has been on a long-term uptrend since August 2013 when it took support at ₹400. Within this uptrend the stock was shackled between ₹720 and ₹840 for about eight months with an upward bias.
On January 27, the stock surged 7 per cent with good volume, decisively breaking through the upper boundary of the sideways consolidation phase. Subsequently, the stock went through a minor corrective decline and bounced back. Now, the stock appears to have resumed its primary uptrend.
The daily relative strength index has entered the bullish zone from the neutral region and the weekly RSI is featuring in this zone. It can continue its upward journey and reach the price of ₹925 and then ₹942 in the upcoming sessions. Buy the stock with a stop-loss at ₹870.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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