Technical Analysis

Gujarat Alkalies and Chemicals (₹421): Buy

Yoganand D BL Research Bureau | Updated on September 05, 2019 Published on September 05, 2019

Investors with a short-term perspective can consider buying the stock of Gujarat Alkalies and Chemicals at current levels. The stock jumped 7 per cent accompanied by good volume on Wednesday, breaking above a key near-term resistance level at ₹412 and the 21-day moving average.

Following a medium-term downtrend from the late May 2019 high of ₹595, the stock found support at ₹376, recording a 52-week low in late August this year. Triggered by positive divergence in the daily relative strength index and the price rate of change indicator, the stock changed direction in late August. The stock, thereafter, began to trend upwards and is in a near-term up-move.

There has been an increase in daily volume over the past one month. The daily RSI hovers in the neutral region and the weekly RSI is on the brink of entering the neutral region from the bearish zone. Also, the daily price rate of change indicator has entered the positive territory implying buying interest.

The short-term outlook is bullish. The stock can extend the up-move and reach the price targets of ₹438 and ₹446 in the short term. Traders can buy with a stop-loss at ₹412.

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

Published on September 05, 2019
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