Stock is moving in down trend since January 2008, It fell from Rs 844 to Rs 46.55 level. But after touching 46.55 level in August 2012, it made higher high & lows. Yesterday it broke the long term falling trendline resistance in weekly chart and it also broke the previous high of Rs. 78.80, which clearly indicates the trend reversal.
We saw “Inverted Head & Shoulder” breakout in the stock in weekly chart in month of Nov 22, 2012 with healthy volumes, which is bullish chart pattern. At that time also I gave buy call on the stock (Rs 62.35) for target of Rs 78, which got achieved on Dec 23, 2012.
On the oscillator front, RSI indicator is advancing and making higher highs and moving well above its average. It also broke the resistance trendline in weekly chart, which indicates the bullishness in the counter.
MACD is also moving in upward direction in positive zone, which supports the buy call on the stock.
Looking at all indicators and patterns, I expect the reversal on cards for medium to long term. Thus, I recommend to Buy the stock at CMP: 79.80 and on dips to 75 for the target of 99/107 with the stoploss of 72.50 on closing basis.
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