Comments
We recommend a buy in the stock of National Aluminium Company (Nalco) from a short-term perspective. It is evident from the charts of the stock that since encountering resistance at Rs 120 in March 2011, the stock has been on a long-term downtrend.
Medium-term trend is also down for the stock. However, the stock's long-term support band between Rs 48 and Rs 50 arrested its decline in late November 2011. Thereafter this support band cushioned the stock from declining further. The stock recently changed its direction, triggered by positive divergence in the daily moving average convergence divergence and price rate of change indicators.
On Monday, the stock jumped 4.4 per cent with good volume, breaching its 21-day moving average and immediate resistance at Rs 50. Moreover, weekly relative strength index and MACD are displaying positive divergence, backing the stock's reversal. The daily price rate of change indicator has entered into the positive area implying buying interest.
Taking a contrarian view on the stock, we are bullish on it from a short-term perspective. We anticipate it to move higher and reach our price target of Rs 54.5 or Rs 56.5 in the ensuing trading sessions. Traders with short-term perspective can consider buying the stock with stop-loss at Rs 51.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.