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Investors with a short-term perspective can buy the stock of REC at current levels. The stock has been on an intermediate-term sideways consolidation phase in a wide band between ₹95 and ₹125 since May this year. Significant support in the range between ₹95 and ₹100 has been providing base for the stock since late September. In early December, the stock took support in the band and bounced up. Since then, the stock has been on a near-term uptrend.
On Monday, the stock gained 3.7 per cent accompanied with above average volume, breaching above its 50-day moving average and an immediate resistance at ₹110. The stock trades well above its 21- and 50-day moving averages. Moreover, there has been an increase in volume over the past four weeks. The daily relative strength index is on the brink of entering the bullish zone from the neutral region and the weekly RSI is hover in the neutral region. Besides, the daily as well as weekly price rate of change indicators feature in the positive territory implying buying interest.
The near-term outlook is bullish for the stock. It can continue to trend upwards and reach the price targets of ₹118.5 and ₹121 in the upcoming trading sessions. Traders can buy with a stop-loss at ₹110.5.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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