Technical Analysis

Ambuja Cements (₹212.7): Buy

Yoganand D BL Research Bureau | Updated on July 25, 2018 Published on July 24, 2018

Decisively breaching its 21- and 50-day moving averages, the stock of Ambuja Cements gained 7.5 per cent accompanied with extraordinary volume on Tuesday. Investors with a short-term perspective can buy the stock at current levels.

After a short-term downtrend in the month of May and early June, the stock found support in the band between ₹190 and ₹197 in late June. This support zone provided base for the stock in the previous week as well. Triggered by positive divergence in the daily moving average convergence divergence indicator, the stock changed direction and started moving higher.

The daily relative strength index has entered the bullish zone from the neutral region and the weekly RSI has entered the neutral region from the bearish zone. Both the daily and weekly price rate of change indicators are featuring in the positive terrain implying buying interest.

The short-term outlook is bullish for the stock. It can continue to trend upwards and reach the price targets of ₹222 and ₹226 in the ensuing trading session. Buy with a stop-loss at ₹208.

(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)

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