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The stock of Hindustan Zinc jumped 7.3 per cent backed by above-average volume on Friday, breaking above a vital long-term barrier at ₹224.
This up-move has strengthened the intermediate-term uptrend that has been in place since the stock took support at ₹122 in late March this year.
Moreover, the recent rally provides investors with a medium-term perspective an opportunity to buy the stock at current levels.
The recent rally has conclusively surpassed the stock’s 21- as well as the 50-day moving averages, and the stock trades well above these moving averages. Following a corrective decline, the stock found support at ₹202 and bounced up strongly last week, ending the corrective down-move.
The stock appears to be building bullish momentum now.
Although it faces a key resistance ahead at ₹250, an emphatic break above this resistance can pave the way for an up-move to ₹260 and beyond. The short-term trend is up now.
The daily relative strength index (RSI) has just entered the bullish zone from the neutral region and the weekly RSI has entered the bullish region, implying buying interest. Besides, the daily as well as the weekly price rate of change indicators feature in the positive terrain, signifying buying interest.
Outlook is bullish for the stock, and it has the potential to extend the uptrend and reach the price targets of ₹260 and ₹275 in the medium term. Investors with a medium-term horizon can buy the stock with a stop-loss at ₹218.
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