Investors with a short-term perspective can buy the stock of Nippon Life India Asset Management at current levels. After recording a 52-week high at ₹452.9 in late February this year, the stock changed direction and started to decline. The stock has been in a short-term downtrend since then. But it found support at around ₹200 in late March and started to trend upwards triggered by positive divergence on the daily relative strength index.

Over the past one week, the stock has been in a corrective rally. On Wednesday, the stock gained almost 4 per cent accompanied by above average volume and managed to close above the near-term resistance level of ₹250. It has rallied 6.6 per cent this week with good volume.

The daily RSI has entered the neutral region from the bearish zone and the weekly RSI re-entered the neutral region from the bearish zone. The daily as well weekly price rate of change indicators are recovering from the oversold territory.

Taking a contrarian view, the short-term outlook seems to be positive for the stock and it has potential to extend the corrective rally. Short-term targets are ₹270 and ₹277. Traders can buy the stock with a stop-loss at ₹250 levels.

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

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