Technical Analysis

Trading pick of the pick: Buy Gujarat Pipavav Port

Yoganand D | Updated on September 20, 2020 Published on September 20, 2020

The stock of Gujarat Pipavav Port (GPPL) jumped 8 per cent with heavy volumes on Friday, breaking above a key resistance at ₹84.

This rally has taken the weekly gains to 10.7 per cent.

Investors with a medium-term perspective can buy the stock at current levels. Since marking a 52-week low at ₹45.5 in late March, the stock has been on an intermediate-term uptrend.

In late June, the stock surpassed a key resistance at ₹76 as well as the 200-day moving average, which subsequently turned into a key base and provided support in early August.

Thereafter, the stock continued to trend upwards and decisively breached its 21- and 50-day moving averages on Friday. It now trades well above the 50- and 200-day moving averages.

With the recent rally, the stock appears to have resumed the short-term uptrend. The daily relative strength index features in the bullish zone and the weekly RSI has entered the bullish zone from the neutral region.

Further, the daily as well as the weekly price rate of change indicators are featuring in the positive terrain, implying buying interest.

With the bullish momentum, the stock has the potential to trend northwards to reach the price targets of ₹100 and then ₹105, with a minor pause at the psychological resistance level of ₹100 over the medium term.

Investors with a medium-term perspective can buy the stock with a stop-loss at ₹82.

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Published on September 20, 2020
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