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We recommend a buy in the stock of VIP Industries from a short-term perspective. It is apparent from the charts of the stock that following an intermediate-term downtrend from February 2012 peak of Rs 127, the stock found support at around Rs 70 in late July. The stock bounced up in late August, after testing its key support at around Rs 70. Since then, the stock has been on a short-term uptrend.
On Monday, the stock jumped 5.8 per cent accompanied by above average volumes, breaching a key resistance at Rs 75 and its 50-day moving average at around Rs 78. This rally has reinforced the stock’s short-term uptrend. The daily relative strength index has entered the bullish zone from the neutral region and weekly RSI is moving higher in the neutral region. The daily price rate of change indicator is featuring in the positive terrain implying buying interest.
We are bullish on the stock from a short-term perspective. We anticipate the stock’s rally to prolong and reach our price target of Rs 82.5 or Rs 84 in the upcoming trading sessions. Traders with a short-term perspective can buy the stock with stop-loss at Rs 79.
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