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The stock of ITI jumped 7.6 per cent accompanied by above average volume on Tuesday, rebounding from a key support level of ₹80. This rally provides investors with a short-term perspective an opportunity to buy the stock at current levels.
Since it took support at ₹56 in late August, the stock has been in a medium-term uptrend. Within this uptrend, the stock began to move in a narrow range between ₹80 and ₹86 since late September.
However, on Tuesday, the stock bounced up from the lower boundary backed with volume and now tests the upper boundary with a positive bias. An emphatic break above the current resistance will underpin the bullish momentum and push the stock higher.
The recent rally has breached the 21-DMA and trades well above it. The daily relative strength index has entered the bullish zone from the neutral region and the weekly RSI moves higher in the neutral region. Both the daily as well as the weekly price rate of change indicator have entered the positive terrain implying buying interest.
The short-term outlook is positive. Targets are ₹90.5 and ₹92. Traders can buy the stock with a stop-loss at ₹84.5.
Note: The recommendations are based on technical analysis. There is a risk of loss in trading.
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