OnMobile Global (Rs 268): Buy

Yoganand D, BL Research Bureau, recommend a buy in the stock of OnMobile Global from a short-term perspective. It is apparent from the charts that the stock has been on a long-term downtrend from its July 2009 peak of Rs 682, forming lower peaks and lower troughs. In early October 2010, the stock encountered resistance at Rs 400 and resumed its long-term downtrend. This downtrend accelerated and in a short time span the stock breached its 50 and 200-day moving averages. However, after reaching significant longer-term support in the band between Rs 250 and Rs 260, it bounced up almost 7 per cent on November 29. From intra-day low the stock gained 18 per cent in that session forming long hammer candlestick pattern, which is a bullish reversal pattern. We notice that there is an increase in volume over the past two trading session. The daily relative strength index is recovering from the oversold territory. Moreover, the stock is rebounding from the lower boundary of the Bollinger band in daily chart implying upward momentum. Considering the presence of longer-term support band and formation of bullish hammer candlestick pattern, we take a contrarian stance on the stock for a short-term horizon. We are bullish on the stock and expect it to move up further until it hits our price target of Rs 273 or Rs 285 in the forthcoming trading session. Traders with short-term perspective can buy the stock with stop-loss at Rs 260.



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