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Investors with a short-term perspective can buy the stock of V-Guard Industries at current levels. The stock has been in an intermediate-term uptrend since it took support at around ₹160 in September 2020. Significant long-term support in the band between ₹150 and ₹160 had provided base for the stock.
The stock registered a 52-week high at ₹285 in late May and was on a medium-term donwtrend until this week. Recently the stock found support at ₹231 and bounced up triggered by positive divergence in the daily relative strength index.
On Wednesday, the stock advanced 3.3 per cent and managed to close above the 21-day moving average.The stock has gained 4.5 per cent this year and has formed a bullish engulfing candlestick pattern in the weekly chart indicating short-term trend reversal is on the cards.
Taking a contrarian stance, the short-term outlook is bullish. It has potential to extend the up-move and reach the price targets of ₹259 and ₹264. Traders can buy with a stop-loss at ₹242.
(Note: The recommendations are based on technical analysis. There is risk of loss in trading.)
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