EID Parry buy on dips !

We recommend a buy in the stock of EID Parry from a short-term trading perspective. It is evident from the charts of the stock that after encountering resistance around Rs 280 in early January 2011, the stock started to decline. The stock found support in the range between Rs 200 and Rs 205, a significant long-term base level in this February and once more in March and bounced upwards. Since then it has been consolidating sideways in a broad range of Rs 200 and Rs 240. In recent times the stock took support once again from this significant support level, around Rs 205 and bounced up.

On June 7, reinforcing the bullish momentum the stock jumped 4 per cent breaching its 21 and 50-day moving averages. Both daily and weekly relative strength indices are heading towards the bullish zone in the neutral region. Daily moving average convergence divergence indicator has signalled a buy and is rising toward the positive territory. Moreover, both daily as well as weekly price rate of change indicator are featuring in the positive area indicating buying interest.

We are bullish on the stock from a short-term perspective. We expect EID Parry to move higher until it reaches our price target of Rs 228 or Rs 237.5 in the forthcoming trading sessions. Traders with short-term perspective can buy the share with a stop loss at 217

Source :

Author D Yoganand

Business Line

Our Recommendation :

The stock has become a traders delight. While you can sell when the sugar sector is on an upswaing you should buy on dips when the sell off in sugar stocks happen during a bad day ! The stock is finding support at Rs.194 levels while the 270 level is triggering profit booking

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