Technical Analysis

Dalmia Bharat Sugar & Industries (₹112.7): Buy

Yoganand D BL Research Bureau | Updated on February 07, 2020 Published on February 07, 2020

The stock of Dalmia Bharat Sugar and Industries skyrocketed almost 17 per cent with above average volume on Thursday, breaking above a key resistance at around ₹108. This rally provides traders with a short-term perspective an opportunity to buy the stock at current levels.

Encountering a key resistance in the band between ₹130 and ₹134 in January, the stock started to decline. Last week it plummeted breaking a vital support at ₹108. However, it found support at ₹95 during this week and changed direction triggered by positive divergence on the daily relative strength index and price rate of change indicator.

 

Significant long-term support at around ₹95 and the 200-DMA at ₹100 had cushioned the stock recently. It trades well above the 50- and 200-DMAs. The daily relative strength index has entered the neutral region from the bearish zone and the weekly is likely to re-enter the bullish zone from the neutral region.

With the recent rally, the stock appears to have resumed its medium-term uptrend that has been in place since last December low of ₹82. The short-term view is bullish for the stock. It can continue to trend upwards and reach the price targets of ₹118 and ₹120. Traders can buy the stock with a stop-loss at ₹110.

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

Published on February 07, 2020
This article is closed for comments.
Please Email the Editor