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The stock of Gujarat Gas jumped 10 per cent on Thursday, breaking above a key immediate resistance at ₹222. This rally provides investors with a short-term perspective an opportunity to buy the stock at current levels. After a short-term downtrend from the key resistance level of ₹300, the stock found support at around ₹190 on Tuesday. Subsequently, the stock changed direction triggered by positive divergence in the daily relative strength index.
In the past two trading sessions, the stock has been in a corrective rally that can be extended in the short term. The 200-DMA at around ₹210 is cushioning the stock. The daily RSI is on the brink of entering the neutral region from the bearish zone and the weekly RSI is hovering in the neutral region. Also, the daily price rate of change indicator is recovering from the oversold territory.
Taking a contrarian stance, the short-term outlook appears to be bullish for the stock. It can extend the ongoing corrective rally and reach the price targets of ₹242 and ₹250 in the short term. Traders can buy the stock with a stop-loss at ₹225 levels.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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