Investors with a short-term perspective can consider buying the stock of Monnet Ispat & Energy at current levels. After encountering key resistance near ₹159 in early June, the stock has been on a medium-term downtrend. Upon breaking a significant psychological support at ₹100, the stock fell sharply in late September.
However, the stock’s long-term base in the band between ₹65 and ₹70 was arrested the decline recently. After recording a low of ₹68 on Monday, the stock has surged 5.4 per cent accompanied by extraordinary volumes on Tuesday.
The stock is showing signs of reversal. A positive divergence in the daily relative strength index backs the stock's reversal. The daily price rate of change indicators display positive divergence adding strength. Taking a contrarian stance on the stock, we are bullish on it from a short-term perspective.
The stock can extend its upmove and reach the price target of ₹76 and ₹77.5 in the upcoming trading sessions. Buy the stock with a stop-loss at ₹71.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)