We recommend a buy in the stock of Sical Logistics from a short-term perspective. It is evident from the charts of the stock that after encountering resistance in the band between Rs 100 and Rs 105 in April 2010, it started to decline. However, in late October 2010, the stock found support at its intermediate-term support range between Rs 60 and Rs 62 and changed direction triggered by positive divergence displayed in the daily moving average convergence divergence oscillator. Moreover, the stock jumped 7 per cent with above average volume on November 1, breaching its 21-day and 50-day moving average.
The daily relative strength index has entered the bullish zone and weekly RSI has entered the neutral region from the bearish zone. Daily MACD has signalled a buy. We are bullish on the stock from a short-term perspective. We expect Sical Logistics to rally further until it hits our price target of Rs 70 or Rs 71 in the upcoming trading session. Traders with short-term perspective can consider buying the stock with stop-loss at Rs 65.
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