Technical Analysis

Trading pick of the week: Buy Aptech

Yoganand D | Updated on August 23, 2020

The stock of Aptech gained 6.9 per cent accompanied by above-average volumes on Friday, breaching a key long-term resistance at ₹120 and its 200-day moving average. This rally provides investors with a medium-term perspective an opportunity to buy the stock at current levels.

Following a medium-term downtrend, the stock had found support in the band between ₹65 and ₹70 in late March this year and changed direction. Since then, it has been on an intermediate-term uptrend, forming higher peaks and higher troughs. The short-term trend is also up.

In early July, the stock had decisively breached its 21- and 50-day moving averages, and trades well above them.

Strengthening the bullish momentum, the stock jumped almost 17 per cent in the past week.

Notably, there has been an increase in daily volume since early July.

The daily relative strength index (RSI) features in the bullish zone and the weekly RSI has entered the bullish from the neutral region.

Moreover, the daily as well as the weekly price rate of change indicators are hovering in the positive terrain, implying buying interest. The stock’s recent breakthrough of a key hurdle at ₹120 has underpinned the uptrend, and the medium-term outlook is bullish.

It has the potential to extend the uptrend and reach the price targets of ₹144 and ₹155 in the medium term. Investors with a medium-term horizon can buy the stock with a stop-loss at ₹118.

Published on August 23, 2020

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