Investors with short-term perspective can consider buying the stock of Tata Elxsi. It is apparent from the charts of the stock that after marking a 52-week low at Rs 167 in late December 2011, the stock changed its direction. It is on a medium-term uptrend since then. Further, we notice formation of an inverse head and shoulder pattern, a bullish reversal pattern since November 2011.

On Thursday, the stock jumped eight per cent with extraordinary volume, conclusively breaking above the neckline of the inverse head and shoulder pattern. Moreover, this up move has penetrated a key resistance as well as long-term down trendline at around Rs 210.

The stock is hovering well above its 21- and 50-day moving averages. The daily relative strength index is featuring in the bullish zone and weekly RSI is likely to enter this zone from the neutral region. The daily moving average convergence divergence indicator is moving higher in line with the stock price, signalling upward momentum.

Both daily and weekly price rate of change indicators are hovering in the positive terrain implying buying interest. We are bullish on the stock from a short-term perspective. We expect its up move to continue and knock our price target of Rs 226 or Rs 235 in the ensuing trading sessions. Traders with short-term perspective can consider buying the stock with stop-loss at Rs 215.

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