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The stock of VIP Industries jumped 5.8 per cent accompanied by volume on Tuesday, breaking above a crucial resistance level of ₹305. This rally provides traders with a short-term perspective an opportunity to buy the stock. After a corrective decline in October, the stock found support at ₹270 in early November. Since then, the stock has been on a near-term uptrend.
Last week, it conclusively breached the 50- and 200-day moving averages and trades well above these moving averages, which is also a positive from a short-term perspective. The daily relative strength index (RSI) features in the bullish zone and the weekly RSI is likely to enter the bullish zone from the neutral region. Besides, the daily and the weekly price rate of change indicators hover in the positive terrain, implying buying interest.
Although the stock now tests a key resistance at ₹325, it has the potential to surpass that and extend the uptrend. A conclusive breakthrough of ₹325 can take the stock northwards to the short-term price targets of ₹245 and ₹250. Traders with a short-term horizon can buy the stock with a stop-loss at ₹230 levels.
The recommendations are based on technical analysis. There is a risk of loss in trading
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