The stock of Motherson Sumi Systems surged 12.7 per cent accompanied by extraordinary volume on Wednesday, decisively breaking a key resistance level at ₹67. Investors with a short-term view can buy the stock at current levels.
Following a sharp fall in the stock price in early March, the stock recorded a 52-week low at ₹48.5 in late March. Subsequently, triggered by positive divergence in the daily RSI, the stock changed direction and began to trend upwards. The stock has formed a key support in the band between ₹48 and ₹54.
The recent breakthrough of a key resistance at ₹67 as well as the 21-DMA is short-term positive for the stock. There has been an increase in daily volume over the past three weeks.
The daily RSI has entered the neutral region from the bearish zone and the weekly RSI is recovering from the oversold territory. Further, the daily price rate of change indicator is featuring in the positive terrain, indicating buying interest.
The short-term outlook is bullish for the stock. Targets are ₹74.5 and ₹76.5. Traders with a short-term horizon can buy the stock with a stop-loss at ₹69.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)