We recommend a buy in the stock of Sasken Communication Technologies from a short-term perspective. It is evident from the charts of the stock that following a medium-term downtrend from its early April 2013 peak of Rs 159, the stock found key long-term support in the base band between Rs 110 and Rs 115 in the previous week. Triggered by positive divergence in the daily relative strength index and daily price rate of change indicator, the stock changed direction recently. The daily RSI has recovered from the over-sold territory and is on the brink of entering in to the neutral region from the bearish zone. The weekly RSI has re-entered the neutral region from the bearish zone. We notice the formation of a dragonfly doji pattern at the end of the downtrend in the weekly chart signalling that the downtrend has come to a halt. Further, daily moving average convergence divergence indicator is displaying positive divergence backing the stock's trend reversal and has signalled a buy. Taking a contrarian stance on the stock, we are bullish on it from a short-term perspective. We expect the up move to continue and reach our price target of Rs 122 or Rs 124.5 in the ensuing trading sessions. Traders with short-term perspective can consider buying the stock with stop-loss at Rs 115 levels.

(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)

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