BUY EVEREADY INUSTRIES @ RS.70.6 - HINDU BUSINESS

We recommend a buy in the stock of Eveready Industries from a short-term perspective. It is seen from the charts of the stock that it has been on a long-term uptrend from its December 2008 low of Rs 11.9. However, the stock encountered resistance around Rs 81 in early September 2010, and has been on a correction. After retracing 50 per cent Fibonacci retracement of its prior up-move, the stock found support around Rs 67 last week. Moreover, this level is also a significant intermediate-term support level. The stock jumped 4.7 per cent accompanied with above-average volume on October 27, reinforcing its uptrend. Besides, the stock has breached its 21-day moving average, which is a positive signal. Daily moving average convergence divergence oscillator has signalled a buy. Both the daily as well as weekly relative strength indices are heading towards bullish zone. We are optimistic on the stock from a short-term perspective. We anticipate the stock to move higher, until it hits our price target of Rs 73 or Rs 75 in the forthcoming trading sessions. Traders with short-term horizon can buy with stop-loss at Rs 68.



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