The stock of Granules India has gained 4 per cent with good volume on Thursday, breaking above an immediate resistance at ₹93. This rally provides traders with a short-term view an opportunity to buy the stock at current levels.
Following a medium-term downtrend, the stock found support at around ₹84 in late July. Taking support from a medium-term base level and triggered by positive divergence in the daily relative strength index as well as price rate of change indicator, the stock changed direction. The stock has been in a near-term uptrend over the past two weeks, backed with good volume. While trending up, the stock breached its 21- and 50-day moving averages and closed above them.
A strong rally above ₹100 will strengthen the uptrend and take the stock higher. The daily RSI is on the brink of entering the bullish zone from the neutral region and the weekly RSI features in the neutral region. Also, the daily price rate of change indicator hovers in the positive terrain implying buying interest. The short-term outlook is bullish for the stock. Targets are ₹101.5 and ₹103.5. Traders can buy with a stop-loss at ₹95.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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