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Investors with a short-term horizon can buy the stock of NMDC at current levels. Following a medium-term downtrend from the September 2018 high of ₹124, the stock found support at ₹86.4 in early December. Thereafter, it began to move sideways and the significant support in the band between ₹86 and ₹90 continued to provide a base. Last week, the stock took support at around ₹90 and changed direction, triggered by positive divergence in the daily moving average convergence divergence indicator.
NMDC surged 4.7 per cent accompanied by above-average volume, breaching its 21- and 50-day moving averages on Wednesday. There has been an increase in daily volumes over the past two trading sessions. The daily relative strength index has entered the bullish zone from the neutral region and the weekly RSI has entered the neutral region from the bearish zone.
Besides, the daily and weekly price rate of change indicators are featuring in the positive terrain. Taking a contrarian stance, we are bullish on the stock from the short-term perspective. NMDC can continue to trend upwards and reach the target of ₹101 and ₹103. Traders can buy with stop-loss at ₹94.5.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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