Investors with medium-term perspective can buy the stock of Jyothy Laboratories (Rs 316.8). Since October 2008 low of Rs 42, the stock has been on steady long-term uptrend, forming rising peaks and troughs. In May, the stock took support at Rs 160, which is a key long-term support level and resumed its uptrend. After breaching its 21- and 50-day moving average in early part of last week, the stock emphatically penetrated its short-term resistance around Rs 305. It gained 11.7 per cent last week and the volume was also strong. The daily relative strength index is featuring in the bullish zone and weekly RSI has re-entered this zone conclusively. Daily moving average convergence divergence oscillator has signalled a buy and is hovering in the positive territory and weekly MACD is also hovering in this territory implying upward momentum. Both daily and weekly price rate of change indicators are featuring in the positive territory.
We are bullish on Jyothy Laboratories from a medium-term perspective. We believe that it has the potential to trend northwards to our price target of Rs 365 in the approaching weeks. Investors with medium-term perspective can consider buying the stock with stop-loss at Rs 293. Short-term traders can buy the stock for a target of Rs 340 with stop-loss at Rs 305.
Follow up - Praj Industries (Rs 71.5)
The stock moved sideways with negative bias last week and ended near our recommended price level. We reiterate our medium-term bearish outlook on the stock with price target of Rs 60 and stop-loss at Rs 78 levels.
(This recommendation is based on technical analysis. There is a risk of loss in trading.)
From: http://www.thehindubusinessline.com/2010/10/25/stories/2010102551920400.htm
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