Thursday, December 23, 2010

V Guard Buy on declines


We recommend a buy in the stock of V-Guard Industries from a short-term perspective. It is apparent from the charts of the stock that after 50 per cent Fibonacci retracement of its prior up move (from May 2010 trough to early November peak), it found support around Rs 155 last week. A medium-term support around Rs 155 also provided support to halt the stock's corrective decline from Rs 215. The stock subsequently changed direction triggered by positive divergence displayed in the daily price rate of change indicator. On December 22, the stock jumped 5 per cent accompanied with high volumes, breaching its 21-day moving average and reinforcing the bullish momentum. The long- and medium-term trends for the stock are up. Daily relative strength index is rising in the neutral region towards the bullish zone and weekly RSI is likely to re-enter the bullish zone from the neutral region. The daily moving average convergence-divergence oscillator has signalled a buy and the price rate of change indicator has entered into positive territory implying buying interest. We are bullish on the stock from a short-term horizon. We expect it to move higher until it reaches our price target of Rs 185 or Rs 190 in the approaching trading sessions. Short-term traders can consider buying the stock with stop-loss at Rs 174.

Yoganand D.

Source : Businessline.in

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