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The stock of EID-Parry India gained 10 per cent with above average volume on Monday, decisively breaking above a key near-term resistance at ₹127. This rally provides an opportunity to buy the stock at current levels for the investors with a short-term perspective.
The stock had encountered a key resistance at ₹245 in early February this year and started to decline. Since then, the stock has been in a short-term downtrend. It had breached a key supports at ₹200 and ₹170 while trending down. However, the stock found support after recording a 52-week low at ₹100 in the previous week. Triggered by positive divergence in the daily RSI the stock changed direction and has begun to trend upwards recently. This rally has conclusively breached the immediate resistance at ₹127 in the last session and has strengthened the bullish momentum.
The daily RSI has entered the neutral region from the bearish zone and the weekly RSI is recovering from the oversold territory. Taking a contrarian stance, the short-term outlook appears to be positive for the stock and it has potential to trend upwards. Short-term targets are ₹142 and ₹147. Traders can buy the stock with a stop-loss at ₹132.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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