Technical Analysis


Yoganand D | Updated on October 21, 2018 Published on October 21, 2018

Investors with a medium-term perspective can buy the stock of Mangalore Refinery and Petrochemicals Ltd (MRPL) at current levels; it closed at ₹84, advancing 3.5 per cent on Friday. The company is a Mangalore-based subsidiary of ONGC. The stock has been on an intermediate-term downtrend since encountering a vital resistance at ₹140 in November 2017. Since then, the stock has been forming lower peaks and lower troughs. Though the medium-term trend is down, the short-term trend is up for the stock. After marking a 52-week low at ₹61.25 in early October, the stock changed direction, triggered by positive divergence in the weekly relative strength index and moving average convergence/divergence indicator. Subsequently, the stock witnessed a sharp rally; it had rallied 29 per cent the week before. However, the stock is currently testing a key resistance at ₹85.

The daily relative strength index (RSI) is featuring in the bullish zone and the weekly RSI continues to trend upwards in the neutral region. Both the daily and weekly price rate of change indicators feature in positive terrain, implying buying interest. After a sharp rally, the stock is placed at a key resistance with a positive bias. The stock trades well above its 21- and 50-day moving averages.

The short-term outlook is bullish for MRPL. The stock can resume its uptrend and reach the price target of ₹90 and ₹95 in the ensuing weeks. Investors with a medium-term perspective can consider buying the stock with a stop-loss at ₹80 levels.

(This recommendation is based on technical analysis. There is a risk of loss in trading.)

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Published on October 21, 2018
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