We recommend a buy in the stock of Polaris Software Lab from a short-term perspective. It is apparent from the charts that the stock has been trending up, after bottoming around Rs 33 in January 2009. However, after encountering resistance around Rs 200 in January 2010, the stock started to move sideways in a broad range between Rs 140 and Rs 200. Polaris has been on a nascent short-term uptrend from November, taking support from its lower boundary (Rs 140).
On January 18, the stock surged 5 per cent accompanied with good volumes, breaching its 21 and 200-day moving averages. This has restored the bullish momentum in the stock. The 14-day relative strength index has entered the bullish zone from the neutral region and weekly RSI is heading towards this zone. Daily moving average convergence divergence indicator is featuring in the positive territory and weekly MACD is on the brink of entering this territory, implying upward momentum. Both daily and weekly price rate of change indicators are hovering in the positive area signal buying interest.
We are bullish on the stock from a short-term perspective. We anticipate its up-move to prolong until it reaches our price target of Rs 191.5 or Rs 195. Short-term traders can consider buying the stock with stop-loss at Rs 178.
BL Research Bureau
OUR RECOMMENDATION :
Polaris software is trading in a range Rs.160-190 getting good support around 165 levels and has a resistance around 185 levels. Traders can enter the stock at the bottom of the range on a weak day and sell around 180 levels.