We recommend a buy in the stock of UTV Software Communications from a short-term perspective. It is evident from the charts of the stock that since March 2009 low of Rs 182; it has been on a long-term uptrend shaping higher peaks and bottoms. Moreover, its medium-term trend is also up from July 2010 trough of Rs 391. After taking support around Rs 510 in early December, the stock resumed its uptrend. On January 4, the stock surged 5 per cent breaking through a significant resistance level at Rs 570. This was accompanied with unusual volume.
The stock is hovering well above its 21 and 50-day moving averages. The 14-day relative strength index has entered into the bullish zone from the neural region and weekly RSI is on the brink of entering into this zone. Following a buy signal, daily moving average convergence divergence oscillator is featuring in the positive territory implying upward momentum. We are bullish on the stock from a short-term horizon considering its recent break-out. We anticipate it to move higher until it hits our price target of Rs 605 or Rs 620 in the forthcoming trading sessions. Short-term traders can consider buying the stock with stop-loss at Rs 576.
Yoganand D./BusinessLine
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