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The stock of Kwality gained almost 6 per cent with above average volume on Tuesday. This rally gives investors with a short-term perspective an opportunity to buy the stock at current levels. The stock encountered a key resistance at ₹115 in early January this year and began to decline.
Following a short-term downtrend from this resistance, the stock found support at ₹81 in late February. After two weeks of sideways movement at this base level, the stock started to move higher last week triggered by positive divergence in daily and weekly relative strength index. Since last February there has been an increase in daily volume.
The recent rally has conclusively breached the immediate resistance at ₹90 as well as 21-day moving average. The daily RSI has entered the bullish zone from the neutral region and the weekly RSI has entered the neutral region from the bearish zone.
Though the stock faces an immediate resistance at ₹100, the current bullish momentum has potential to surpass it in the coming trading sessions. Traders can buy the stock with a stop-loss at ₹93. Short-term targets are ₹100 and ₹102.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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