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Investors with a short-term horizon can buy the stock of Nocil (formerly National Organic Chemical Industries Ltd) at current levels. On Tuesday, the stock gained 4.6 per cent accompanied by above average volume and closed above the 21-DMA. In mid-January the stock, which encountered a key medium-term resistance and started to decline fell sharply in end-January. It breached a key support at ₹140 and the 200-DMA. However, subsequently the stock found support at ₹85 and began to trend upwards triggered by positive divergence in the daily relative strength index and price rate of change indicator.
The stock is currently in a corrective rally. There has been an increase in volume over the past four trading sessions. The daily as well as the weekly RSIs are featuring in the neutral region. Both the daily and the weekly price rate of change indicators are likely to enter the positive territory from the negative which can bring-in further buying interest and push the stock higher.
Taking a contrarian stance, the short-term outlook appears to be bullish for the stock. It can continue to trend upwards and reach the price targets of ₹100 and ₹102.5 in the forthcoming trading sessions. Traders can buy the stock with a stop-loss at ₹93.5 levels.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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