Technical Analysis

Chart Focus - Aegis Logistics: Buy

Yoganand D | Updated on April 07, 2019 Published on April 07, 2019

Investors with a medium-term perspective can buy the stock of Aegis Logistics (₹215.1) at current levels. The stock has been in a medium-term uptrend since taking support in the band between ₹170 and ₹175 in mid-February this year. Significant long-term support in the ₹170-175 band had provided base for the stock in October 2018. Moreover, it had formed an inverse head and shoulders pattern in the daily chart between early December 2018 and April 2019. The neck-line of the pattern is at ₹210, which is also a key medium-term barrier.

The stock had conclusively breached this neck-line on Friday by gaining 5.7 per cent with good volume. Interestingly, there has been increase in daily volume over the past one month, backing the pattern. Also, the stock has conclusively surpassed the 50- as well as 200-day moving averages. The daily relative strength index has entered the bullish zone from the neutral region and the weekly RSI features in the neutral region.

Further, the daily as well as weekly price rate of change indicators feature in the positive terrain, implying buying interest. With this breakout of the pattern, the medium-term positive outlook has strengthened and the stock can continue to trend upwards. It has the potential to extend the rally and reach the price targets of ₹240 and ₹250 in the medium term. Traders a medium-term view can buy the stock with a stop-loss at ₹198.

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