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We recommend a buy in the stock of Nitin Fire Protection Industries from a short-term perspective. It is apparent from the charts of the stock that after taking support at around Rs 24 in December 2011, the stock started to move higher. Since then, the stock has been in a long-term uptrend, forming higher peaks and troughs. However, registering an all-time high at Rs 83.3 in mid-November 2012, the stock began to decline. Its key medium-term support in the band between Rs 62 and Rs 64 is providing cushion for the stock. On Friday, the stock jumped more than 4 per cent accompanied by extraordinary volume, after taking base from the aforementioned support band.
This rally has formed a bullish engulfing candlestick pattern indicating short-term trend reversal. The daily relative strength index is moving higher in the neutral region. The weekly RSI is featuring in the bullish zone indicating upward momentum. Long-term up trendline is intact. We are bullish on the stock from a short-term perspective. We expect its rally to continue and reach our price target of Rs 70 or Rs 71.5 in the approaching trading sessions. Traders with short-term perspective can consider buying the stock with stop-loss at Rs 65.8 levels.
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