Comments
Investors with a high risk appetite can buy the stock of Chennai Petroleum Corporation at current levels.
Following a long-term downtrend, the stock registered a multi-year low at ₹47.7 in May this year and found support.
Subsequently, it changed direction and began to trend upwards, triggered by positive divergence on the weekly relative strength index.
The stock had been on a medium-term uptrend until it encountered a resistance in the band between ₹93 and ₹95 in late July.
But then it began to correct from this barrier and was on a short-term corrective decline till mid-October.
A key support at around ₹63.5 provided base for the stock and it subsequently bounced up strongly, breaching the 21- and 50-day moving averages. The stock now trades well above these moving averages.
On Friday, it gained 4.3 per cent with above-average volume, recouping the initial loss, and closed almost flat for the week. The short-term trend is positively biased as the stock tests a resistance at ₹80. The risk-reward profile is also favourable for the bulls.
An emphatic break above ₹80 can take the stock north to ₹90 and then to ₹93 over the medium term. Traders can buy the stock with a stop-loss ₹69.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.