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Investors with a short-term view can consider buying the stock of Ashoka Buildcon at current levels. The stock has been in a medium-term uptrend since taking support at ₹175 in early August this year. In late October, the stock emphatically breached its moving average compression (21-, 50- and 200-day moving averages) at around ₹190 and continued the uptrend. However, after encounter a key resistance at ₹240 in early November, the stock started the decline and found support at ₹200 last week.
Regaining the bullish momentum, the stock jumped 6.6 per cent with above average volume on Wednesday. This rally has emphatically breached an immediate resistance at ₹220. The daily relative strength index is on the brink of entering the bullish zone from the neutral region while the weekly RSI feature in the bullish zone. The stock trades well above its 50 and 200-day moving averages.
With the recent rally the stock appears to have resumed its medium-term uptrend. The short-term forecast is bullish for the stock. It can continue to trend upwards and hit the price targets of ₹238 and ₹242.5 in the forthcoming trading sessions. Buy the stock with a stop-loss at ₹223.5.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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