Greaves Cotton (₹125.9): Buy

   The stock of Greaves Cotton has surged 4.7 per cent accompanied with an above average volume on Wednesday, breaching a near-term resistance at ₹123. Key support at ₹119 had provided base for the stock over the past two weeks.

With the current rally, the stock appears to have resumed its uptrend that commenced from the significant medium-term support level of ₹114 in late March this year. This gives investors with a short-term perspective an opportunity to buy the stock at current levels. Moreover, the stock has breached its 50-day moving average and trades well above 21- as well as the 50-day moving averages.

The daily relative strength index has entered the bullish zone from the neutral region. The short-term uptrend is gathering momentum. Greaves Cotton can extend its uptrend and reach the price targets of ₹131 and ₹133.5 in the ensuing trading session. Traders can buy the stock with a stop-loss at ₹123.

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

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