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Investors with a short-term perspective can buy The New India Assurance Company (NIACL) at current levels. Since the stock took support at ₹100 in early November 2020 and began to trend upwards, it has been in an intermediate-term uptrend.
After a corrective decline from the 52-week high of ₹197 recorded in mid-February this year, the stock found support at ₹140 in late April. The stock subsequently started to trend upwards and has been in a short-term uptrend since April low. Following a minor corrective decline in the past week, the stock has taken support and gained 5 per cent with above average volume on Wednesday. This rally has strengthened the short as well as intermediate-term uptrend.
The stock trades well above the 21- and 50-day moving averages. The daily relative strength index has entered the bullish zone and the weekly RSI continues to feature in this zone. Both the daily and the weekly price rate of change indicators hover in the positive territory implying buying interest. Short-term outlook is bullish and the targets are ₹181.5 and ₹185. Traders can buy the stock with a stop-loss at ₹170.5.
(Note: The recommendations are based on technical analysis. There is risk of loss in trading.)
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