The stock zoomed 18 per cent last week, conclusively breaking through its intermediate-term down trend-line that has been in place since October 2010 and a key resistance at Rs 500. There is an increase in volumes over the past three trading sessions. The stock is trading above its 50-day and 200-day moving averages. Daily relative strength index is featuring in the bullish zone and the weekly RSI has just entered this zone. However, it is facing next key resistance at Rs 550. Decisive surge above this level will take the stock upwards to Rs 600 and to Rs 620 in the medium-term.

Failure to surpass Rs 550 can pull the stock down to its immediate support level of Rs 520. Breakthrough of the next support at Rs 500 will accelerate the stock down to Rs 450 levels.

Educomp Solutions (Rs 223.9)

The stock has been on a long-term downtrend from its October 2009 peak of Rs 1,017. Breaking through significant long-term support level at around Rs 266 (February 2009 low), the stock declined and found support in the band between Rs 190 and Rs 200 in mid August 2011. Taking support from this support band, the stock bounced up 13.6 per cent last week. The stock appears to have reversed its short-term trend backed with positive divergence in the daily relative strength. We observe that there is an increase in weekly volumes over the past four weeks. Current up move can encounter resistances at around Rs 266 and then at Rs 300. Inability to climb beyond Rs 266 will pull the stock down to Rs 200 in the medium-term.

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