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The stock of Exide Industries gained 5.8 per cent with good volume on Thursday, surpassing a key resistance at ₹140 as well as the 21-day moving average.
It jumped almost 15 per cent with good volume in the truncated week.
Investors with a medium-term perspective and contrarian view can buy the stock at current levels.
After encountering a key resistance at ₹208 in late January, the stock began to decline. It had been on a medium-term downtrend until it found support between ₹122 and ₹125 in late March.
Triggered by positive divergence in the daily relative strength index (RSI) and price rate of change indicator, the stock reversed direction recently and breached a key immediate resistance at ₹133 initially and then ₹140.
The daily RSI has entered the neutral region from the bearish zone and the weekly RSI is recovering from the oversold territory and likely to enter the neutral region. Moreover, the daily price rate of change indicator is hovering in the positive territory implying buying interest.
Taking a contrarian view, the short-to medium-term outlook appears to be bullish for the stock. It has the potential to continue the ongoing rally in the forthcoming trading sessions and reach the price targets of ₹159 and ₹168 levels.
Traders with a medium-term view can buy the stock with a stop-loss at ₹137.
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