The stock of Transport Corporation of India (TCI) gained 4.6 per cent with good volume on Friday, decisively breaching the moving average compression (21-, 50- and 200-day moving averages) at ₹295. It closed at ₹311.2. Investors with a medium-term perspective can buy the stock at current levels.
Since registering a 52-week low at ₹232 in October 2018, the stock has been in an intermediate-term up-trend. The medium-term trend is sideways with an upward bias. In early May, the stock took support at ₹280 and began to trend upwards. The stock trades well above its 50- and 200-day moving averages. There has been an increase in daily volume over the past one week.
The daily relative strength index has entered the bullish zone from the neutral region and the weekly RSI features in the neutral region, and is likely to enter the bullish zone. Furthermore, the daily as well as the weekly price rate of change indicators feature in the positive terrain, signalling buying interest.
The key resistance at ₹326 limited the upside in late May. An emphatic break above this hurdle will strengthen the up-move and take the stock higher to ₹350 and then to ₹365 levels with a minor past at around ₹350. The medium-term outlook is bullish. It has the potential to trend upwards and reach the price targets mentioned over the medium term. Investors with a medium-term horizon can buy the stock with a stop-loss at ₹285.
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