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Investors can consider buying the stock of India Nippon Electricals, a small-cap auto ancillary company.
On Thursday, the stock gained 4.4 per cent with above average volume, breaching a key resistance at ₹500 (adjusted). Since taking support in the band between ₹440 and ₹450 in late March this year, the stock has been on a nascent short-term uptrend. Moreover, the stock’s recent rally has conclusively breached its 50- and 200-DMAs.
Long-term trend is up for the stock. The daily relative strength index has entered the bullish zone from the neutral region and the weekly RSI is charting higher in the neutral region towards the bullish zone. Further, the daily price rate of change indicator features in the positive terrain, implying buying interest.
The short-term outlook is bullish for the stock. It has the potential to extend its uptrend and hit the price targets of ₹540 and ₹552 in the ensuing trading sessions. Traders can buy the stock with a stop-loss at ₹508.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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