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The stock price of Bombay Dyeing & Manufacturing Company surged 9.55 per cent on Wednesday. This rally has seen a decisive break of an intermediate resistance at ₹99.50 and has also strengthened the bullish momentum.
Since late March last year, the price of this stock has been moving in a bull channel. There is a strong likelihood of the stock now moving up towards ₹120 – the upper end of the channel in the coming weeks. The level of ₹99.50 can now act as a good resistance-turned-support and can limit the downside. Traders with a short-term perspective can go long at current levels. Accumulate longs at ₹101. Keep the stop-loss at ₹97. Book profits at ₹120. Trail the stop-loss up to ₹109 as soon as the stock moves up to ₹113. Move the stop-loss further up to ₹115 as soon as the stock price touches ₹117.
Since the price has been moving inside a channel, the chances are high for the stock price to reverse lower from around 120 eventually.
(Note: The recommendations are based on technical analysis. There is risk of loss in trading.)
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