We recommend a buy in the stock of Kalyani Steels from a short-term perspective. It is evident from the charts of the stock that it had been on an intermediate-term downtrend from its August 2010 peak of Rs 156 until it found support around Rs 90 in early December. Taking support from its long-term base around Rs 90, the stock changed direction. It has been on a short-term uptrend since then. On January 3, the stock jumped 7.6 per cent accompanied with heavy volume, conclusively breaking through its immediate resistance as well as downtrend line around Rs 110. This has reinforced the bullish momentum and the stock is hovering well above its 21 and 50-day moving averages.
The 14-day relative strength index has entered into bullish zone from the neutral region and weekly RSI is rising in the neutral region. Daily moving average convergence divergence oscillator is on the verge of entering into the positive territory implying upward momentum. Considering the stock's recent break through, we are bullish on it from a short-term perspective. We expect it's ongoing rally to continue until it reaches our price target of Rs 119 or Rs 122.5 in the trading sessions ahead. Traders with short-term perspective can consider buying the stock with stop-loss at Rs 111.5.
Source : Businessline
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