Technical Analysis

Ambuja Cements (₹219.6): Buy

Yoganand D BL Research Bureau | Updated on July 16, 2019 Published on July 16, 2019

Investors with a short-term horizon can buy the stock of Ambuja Cements at current levels. Following a rally in late May, the stock had encountered a key medium-term resistance at ₹240 and began to decline. The stock, which has been in a short-term downtrend since then, found support at ₹204 in mid-June. It took support from this base level in early July and changed direction triggered by positive divergence in the daily moving average convergence divergence indicator.

The stock is currently in a near-term up-move. On Monday, it gained 2.6 per cent with above average volume and breached the 200-day moving average line. There has been an increase in daily volume over past two trading session. Moreover, the stock has managed to close above the 21- as well as 50-day moving averages.

The daily and the weekly relative strength indices are charting upwards in the neutral region. Besides, both the daily as well as weekly price rate of change indicator have entered the positive terrain implying buying interest.

Taking a contrarian view, the short-term outlook is bullish for the stock. It can continue to trend upwards and reach the price target of ₹228.5 and ₹233 in the short term. Buy the stock with a stop-loss at ₹215.

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

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