The stock of Mahanagar Gas has been trading sideways range since February this year. It was stuck in between the support at ₹680 and the resistance at ₹850. That said, last week, the scrip decisively breached the resistance at ₹850.
This breakout also confirms a double-bottom pattern. Thus, the stock is more likely to have witnessed a short-term bullish reversal. The pattern indicates that the price could rise to ₹1,020 and ₹1,050 - the two notable resistances visible from current levels. Considering the above situation, traders can initiate longs at the current levels. Accumulate longs when price dips to ₹850. Place the stop-loss at ₹810. On a rally to ₹1,020, book three-fourth of your positions and tighten the stop-loss to ₹975 for the rest. Exit the remaining long positions at ₹1,050.
(Note: The recommendations are based on technical analysis. There is risk of loss in trading.)