We recommend a buy in the stock of Blue Star Infotech from a short-term perspective. It is evident from the charts of the stock that since January 2010, it has been consolidating sideways in the broad range between Rs 100 and Rs 128. Between late November 2010 and mid- December 2010, the stock tested its lower boundary at Rs 100 which is also a significant long-term support level. The stock is currently in a short-term uptrend. It breached its 200-day moving average recently and is trading well above its 21- and 50-day moving averages. On Tuesday, the stock climbed 1.8 per cent and has managed to close above its immediate resistance level of Rs 114. We observe that there is an increase in volume traded over the past three trading sessions. The 14-day relative strength index is featuring in the bullish zone and weekly RSI is likely to enter this zone. Daily moving average convergence divergence oscillator and price rate of change indicator are hovering in the positive territory implying upward momentum. Our short-term outlook is bullish on the stock. We expect it to move higher until it hits our price target of Rs 120.5 or Rs 124 in the upcoming sessions. Traders with short-term perspective can consider buying the stock with stop-loss at Rs 113.
BL Research Bureau
Our Recommendation :
This mid cap IT company traditionally has a low volume of shares. It is getting good support at 100 levels - keep it as stop loss and buy on decines for a target of 135 holding period 3 months