Investors with a medium-term horizon can buy the stock of Ashoka Buildcon at around current levels. Following a sharp fall in the months of February and March this year, the stock recorded a 52-week low at ₹37 in late March. Since then, the stock has been on an intermediate-term uptrend. But in late August this year, the stock had met with a key resistance at ₹79 and was on a corrective short-term downtrend until it took support at ₹60 in late October.

Thereafter, the stock continued to trend upwards and has been on a short-term uptrend. While trending up, the stock had emphatically breached the 50- and the 200-day moving averages (DMA) in early November and continued to trend upwards.

The stock trades well above the 50- and 200-day moving averages. Further, the 21 and the 50-DMAs have surpassed the 200-day moving average, which is a bullish indication.

Last week, the stock jumped 11.8 per cent with good volume, breaking a key resistance in the band between ₹79 and ₹80.

This upmove has strengthened the intermediate as well as the short-term uptrends of the stock. Notably, there has been an increase in volume over the past four weeks.

The daily relative strength index is featuring in the overbought territory, implying a near-term price correction in the form of a sideways movement or a minor dip is likely. Investors can make use of such corrective decline to buy the stock.

Medium-term view

The weekly RSI has entered the bullish zone from the neutral region after a long period, indicating bullishness. Besides, the daily as well as the weekly price rate of change indicators are featuring in the positive terrain implying buying interest.

Overall, the medium term outlook is bullish for the stock and it could face a minor resistance ahead at ₹90 while trending up. A strong break above this barrier can strengthen the uptrend and take the stock higher to the price target of ₹100 over the medium term. Traders with a medium term view can buy on corrective decline with a stop-loss at ₹79.

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