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Investors with a short-term perspective can buy the stock of Bombay Dyeing & Manufacturing Company at current levels. The stock has been on an intermediate-term uptrend since taking support at around ₹41 in November 2016. After a sharp corrective fall from the high of ₹92.5 , the stock found support at ₹66.4 in May this year and resumed its uptrend. Since then, the stock has been on a medium-term uptrend.
While trending up, the stock has emphatically breached its 21 and 50-day moving averages and trades well above them. On Wednesday, the stock gained 3.7 per cent, snapping a near-term corrective decline. Now, the stock faces a key resistance ahead at ₹90 and has the potential to surpass this level. The daily relative strength index is likely to enter the bullish zone from the neutral region and the weekly RSI is featuring in the bullish zone. Both the daily and weekly price rate of change indicators are hovering in the positive terrain implying buying interest.
The medium-term uptrend is intact. The stock can surpass the immediate resistance at ₹90 and reach the price targets of ₹92 and ₹94 in the upcoming trading sessions. Buy the stock with a stop-loss at ₹86.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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