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Investors with a short-term perspective can consider buying the stock of Graphite India at current levels. Since taking support in the band between ₹70 and ₹72 in December 2016, the stock started to trend upwards. It emphatically breached a key long-term resistance level of ₹85 in January 2017 and continued to trend up. Since last December, the stock has been on an intermediate-term uptrend.
After recording a new high at ₹137.2 on April 5, the stock began to decline, on the back of profit-taking. Following a short-term corrective fall, the stock found support in the range between ₹105 and ₹110 in late May. Subsequently, it resumed its uptrend. On Wednesday, the stock surged 7 per cent with an above average volume breaching a key immediate resistance at ₹115. Moreover, the stock has breached its 21- and 50-DMAs. With this rally, the stock appears to have reinforced the bullish momentum. The daily relative strength index is moving towards the bullish zone in the neutral region and the weekly RSI feature in the bullish zone.
Both the daily and weekly price rate of change indicators hover in the positive terrain implying buying interest. Outlook is bullish for Graphite India. The stock can trend upwards and reach the price targets of ₹124 and ₹127. Buy the stock with a stop-loss at ₹116.5.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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