Stock Fundamentals

Why you can be bullish on Kalpataru Power Tranmission stock

Yoganand D BL Research Bureau | Updated on May 23, 2021

It has the potential to extend the uptrend and reach the price target of ₹480 over the medium term

Investors with a medium-term perspective can buy the stock of Kalpataru Power Transmission at current levels. The stock had witnessed a sharp plunge in February and March 2020 breaching key levels, but it found support at ₹170 in late March and early April 2020. Subsequently, the stock changed direction and started to trend upwards. Since then, the stock has been in a long-term uptrend forming higher peaks and troughs.

While trending up, the stock has conclusively breached a key long-term resistance at ₹270 in November 2020 and continued to trend upwards. After moving sideways for more than two months, the stock emphatically broke out of a key resistance at ₹350 in early February this year. This turned into a key support and provided a base in April 2021. Both medium and short-term trends are up for the stock.

On Friday, the stock gained 4.5 per cent with above-average volume, breaking through a medium-term resistance at ₹400. Moreover, the stock has conclusively breached a key long-term hurdle at ₹400 in the past week by gaining 9.2 per cent and has underpinned the primary uptrend. The stock trades well above the 21- and 50-day moving averages. There has been an increase in weekly volume over the past two weeks. The daily as well as the weekly relative strength indicators are featuring in the bullish zone, backing the uptrend.

Besides, the daily and the weekly price rate of change indicators are hovering in the positive terrain implying buying interest. Overall, the medium-term outlook is bullish for Kalpataru Power Transmission. The stock has potential to extend the uptrend and reach the price targets of ₹460 and then ₹480 over the medium term. Traders with a medium-term horizon can buy the stock with a stop-loss at ₹388 levels.

Published on May 23, 2021

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