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We recommend a buy in the stock of Steel Authority of India from a short-term perspective. It is evident from the charts of the stock that after registering a 52-weeks low at Rs 73 on December 19, 2011, the stock reversed direction. It has been on a medium-term uptrend since then.
Following a corrective decline from mid-February the stock found support Rs 90. It subsequently, started moving sideways testing key short-term resistance at Rs 98. On Tuesday, the stock breached this resistance and 50-day moving average by jumping 3.7 per cent. This up-move appears to have reinforced the bullish momentum.
We observe that there is an increase in volume over the past two trading sessions. The daily price rate of change indicator is featuring in the positive terrain implying buying interest. We anticipate the stock’s up move to continue and touch our price target of Rs 103.5 or Rs 106.5 in the forthcoming trading sessions. Traders with shortterm perspective can buy the stock with stop-loss at Rs 97.
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