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The stock of Tree House Education & Accessories gained 5 per cent with above average volume on Monday.
Investors with a short-term perspective and looking for a contrarian buy can consider the stock at current levels. Following a medium-term downtrend from the July peak of ₹470, the stock appears to have found support, recording a 52-week low at ₹235 on Monday. It bounced back, forming a bullish engulfing candlestick pattern indicating bullish reversal. Further, the stock’s reversal is also triggered by positive divergence in daily relative strength index and moving average convergence divergence indicator. These indicators in the weekly chart are recovering from the oversold territory. As there are initial signs of bullishness and positive divergence, we take a contrarian stance on the stock from a short-term perspective. The stock can extend its rally up to ₹262 and ₹267.5.
Investors with a short-term view can buy with a stop-loss at ₹246.5.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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