The stock of Finolex Industries gained 13 per cent accompanied by extraordinary volume on Monday, breaking above a key resistance at ₹411. This rally provides an opportunity to buy the stock at current levels for investors with a short-term perspective.
Following a sharp fall in mid-March, the stock recorded a 52-week low at ₹283 and found support. Subsequently, the stock bounced up from the oversold territory and has been in a near-term uptrend since then. After a minor pause at around ₹400, it appears to have resumed the uptrend on Monday by surpassing a key resistance as well as 21-day moving average.
The daily relative strength index has entered the neutral region from the bearish zone and the weekly RSI is recovering from the oversold territory. Besides, the price rate of change indicator on the daily chart is featuring in the positive territory implying buying interest.
There has been an increase in daily volume over the past one month. The short-term outlook is bullish for Finolex Industries. It has the potential to trend upwards and reach the price targets of ₹442 and ₹450 in the upcoming trading sessions. Traders can buy with a stop-loss at ₹414 levels.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)