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The stock of Power Grid Corporation of India jumped 3.7 per cent accompanied by above average volume on Monday, breaking above a key long-term resistance at ₹200 as well as a medium-term downtrend-line.
This rally has strengthened the short-term uptrend and provides buying opportunity at current levels for traders with a short-term perspective. Following a medium-term downtrend, the stock took support at ₹178 in early December 2019 and changed direction. Since then, the stock has been in a short-term uptrend. While trending up, it had decisively breached its 21- and 50-day moving averages in late December and continued to trade well above these averages. Moreover, the recent rally has surpassed the 200-DMA and reinforces the bullish momentum.
The daily relative strength index features in the bullish zone and the weekly RSI is on the brink of entering this zone from the neutral region. Both the daily and the weekly price rate of change indicators hover in the positive terrain implying buying interest. There has been an increase in daily volume over the past two weeks.
The short-term outlook is bullish for Power Grid. Targets are ₹213 and ₹217.
Traders can buy with a deep stop-loss at ₹199.
Note: The recommendations are based on technical analysis. There is a risk of loss in trading.
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