We recommend a buy in the stock of Kamat Hotels (India) from a short-term perspective. It is apparent from the charts of the stock that it was consolidating sideways in a broad range between Rs 110 and Rs 135 from mid-April to September 28. On Tuesday, the stock jumped 10 per cent accompanied by a good volume, breaking through the upper boundary of the sideways consolidation. In the past two sessions, the stock has gained 19 per cent. Moreover, we observe there is an increase in volume in the past two sessions.
The stock has been on an intermediate-term uptrend since its March-2009 low of Rs 24 and this trend-line is intact. The daily and weekly relative strength indices have entered the bullish zone from the neutral region. Daily moving average convergence divergence oscillator is featuring in the positive territory and has signalled a buy. The stock is trading well above its 21 and 50-day moving averages.
We are bullish on the stock from a short-term perspective. We anticipate the stock to rally further until it hits our price target of Rs 145 or Rs 150 in the approaching trading sessions. Traders with a short-term horizon may consider buying the stock with stop-loss at Rs 134.
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