We recommend a buy in the stock of Moser Baer India from a short-term perspective. It is evident from the charts that from June 2009 peak of Rs 114, the stock has been on a long-term downtrend. Medium-term downtrend that started in October peak of Rs 74 got arrested at its long-term support level of Rs 50 in late November. Triggered by positive divergence displayed in daily relative strength, the stock changed direction in early December. The stock emphatically broke through its long-term key resistance at Rs 60 by jumping 9 per cent accompanied with extraordinary volume on December 28. It has breached its 50-day moving average reinforcing bullish momentum. The 14-day relative strength index has entered the bullish zone from neutral region, whereas weekly RSI has firmly entered the neutral region from bearish zone. Daily moving average convergence divergence oscillator has signalled a buy. We are bullish on the stock. We anticipate the stock to move higher until it touches our price target of Rs 64.5 or Rs 66.5. Short-term traders can buy the stock while maintaining stop-loss at Rs 60.5.
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