Technical Analysis

Chart Focus: Power Finance Corporation (₹108.5): Buy

Yoganand D | Updated on September 08, 2019 Published on September 08, 2019

Investors with a medium-term time-frame can buy the stock of Power Finance Corporation (PFC) at current levels. Following a short-term downtrend, the stock took support at ₹100 in mid-August and changed direction, triggered by positive divergence in the daily relative strength index and price rate of change. The significant medium-term support level at ₹100 can provide base if any corrective decline occurs. On Friday, the stock gained 4.3 per cent, accompanied by good volume, breaking a key near-term resistance at ₹105 and the 21-day moving average.

 

 

This rally strengthens the bullish momentum and backs the stock’s recent trend reversal. There has been an increase in daily volume over the past two weeks. Since it took support at ₹67 in July 2018, the stock has been trending up. Both the daily and weekly relative strength indices are charting upwards in the neutral region. Also, the daily price rate of change indicator has entered the positive terrain, implying emergence of buying interest. The short to medium-term outlook appears bullish for the stock of PFC. As the stock is reversing higher from a significant support, backed by good volume, it has potential to trend upwards in the medium term. The stock can continue to trend up and reach the price target of ₹125 with a minor pause at ₹118 levels. Investors with medium-term perspective can buy with a stop-loss at ₹99 levels.

Published on September 08, 2019
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