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Investors with a short-term view and contrarian stance can buy the stock of Oil India at current levels. Triggered by positive divergence in the daily relative strength index, the stock jumped 16 per cent with above average volume on Wednesday. Besides, there has been an increase in daily volume over the past one month.
Last week, the stock had recorded a new 52-week low at ₹66 and began to move sideways with a positive bias. On Wednesday, the stock gained 16 per cent, decisively breaking the immediate resistance at ₹80. The daily and the weekly RSIs are recovering from the oversold territory. Similarly, both the daily and the weekly price rate of change indicator are recovering from the oversold territory.
The short-term outlook is bullish for the stock, from a contrarian point of view. It can extend the ongoing rally and reach the price targets of ₹87 and ₹89 in the upcoming trading sessions. Traders can buy the stock with a stop-loss at ₹81.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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