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Investors with short-term perspective can consider buying the stock of Valecha Engineering. It is apparent from the charts of stock that it has been consolidating sideways in a broad band between Rs 48 and 63 since May. In September, the stock took support at its lower boundary of Rs 48 and started trending higher. On December 21, the stock decisively breached its moving average compression (21-, 50- and 200-day moving averages) poised around Rs 57 by gaining 6 per cent. Further, the stock advanced 6 per cent with extraordinary volume, reinforcing bullish momentum on Wednesday and testing its upper boundary.
We notice that there is an increase in volume in the last three trading sessions. The daily relative strength index is hovering in the bullish zone and weekly RSI is on the brink of entering this zone from the neutral region. Both the daily and weekly moving average convergence divergence indicators are featuring in the positive territory implying upward momentum. The daily as well as weekly price rate of change indicators are hovering in the positive area indicating buying interest.
Our short-term outlook is bullish on the stock. We anticipate its up move to continue, breaching the upper boundary and reach our price target of Rs 66 or Rs 67.5 in the ensuing trading sessions. Traders with short-term perspective can buy the stock with stop-loss at Rs 62.20 levels.
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