Technical Analysis

Ashok Leyland (₹90.3): Buy

Yoganand D | Updated on July 03, 2019 Published on July 04, 2019

Investors with a short-term horizon can buy the stock of Ashok Leyland at current levels. The stock has been in a sideways consolidation phase in the band between ₹80 and ₹97 since February this year. In mid-May and June, the stock tested the key support at ₹80 and bounced up strongly. Within the sideways movement, the stock has been in a near-term uptrend over the last two weeks.

On Wednesday, the stock decisively breached its 21- and 50-DMAs by gaining 2.8 per cent with above average volume. Moreover, the stock has surpassed a key resistance at ₹88 which was limiting the upside for the past one week.

The daily relative strength index is on the brink of entering the bullish zone from the neutral region and the weekly RSI hovers in the neutral region. The stock has potential to trend upwards in the short-term. Targets are ₹94 and ₹96. Traders with a short-term outlook can buy with a stop-loss at ₹88.

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

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