We recommend a buy in the stock of Uflex from a short-term perspective. It is evident from the charts of the stock that after bottoming out in March, taking long-term support in the range between Rs 125 and Rs 130, the stock began to move upwards. This trend reversal was also triggered by a positive divergence in daily moving average convergence divergence. Since then the stock has been on a medium-term uptrend.
Last June, the stock took support at around Rs 180 and bounced up penetrating its 50- and 200-day moving averages. Short-term trend is also up for the stock. Reinforcing the bullish momentum, the stock climbed five per cent accompanied by extraordinary volumes on July 22. Daily relative strength index is featuring in the bullish zone and weekly RSI has just entered this zone from the neutral region.
Both daily as well as weekly moving average convergence divergence indicators are featuring in the positive territory implying upward momentum. Considering that the stock's medium-term uptrend line is intact, we are bullish on it from short-term horizon.
The scrip has under performed in line with the market, as evidenced by the prices given below
Buy around Rs.160 levels (recent bottom) We expect the stock up move to prolong until it hits our price target of Rs 226 or Rs 234 in the forthcoming trading sessions. Traders with short-term perspective can consider buying the stock with stop-loss at Rs 218 levels.
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