Technical Analysis

Castrol India (₹144.5): Buy

Yoganand D | Updated on October 25, 2019

The stock of Castrol India jumped 7.8 per cent accompanied by above average volume on Thursday, decisively breaking above a key medium-term resistance at ₹137. Investors with a short-term view can consider buying the stock at current levels as the outlook is bullish.

In August 2019, the stock took support at ₹113 and reversed direction triggered by positive divergence in the daily price rate of change and moving average convergence divergence indicators. Since then, the stock has been on a short-term uptrend. While trending up, it conclusively breached the 21- and 50-day moving averages in mid-September and continued to trend upwards.

After a sideways movement testing the key resistance at ₹137 for almost a month, the stock eventually made an upward breakout on Thursday. The daily relative strength index features in the bullish zone and the weekly RSI is on the brink of entering this zone from the neutral region.

Over the last one week, there has been an increase in daily volume. Short-term outlook is bullish. Targets are ₹150.5 and ₹153.5. Stop-loss can be placed at ₹141.

(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)

Published on October 25, 2019

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