The stock of Kajaria Ceramics gained 7.6 per cent accompanied by above average volume on Thursday, moving above a key resistance level of ₹350. This up move provides short-term investors an opportunity to buy the stock at current levels.
Following a short-term downtrend, the stock recorded a 52-week low at ₹316 on Tuesday. Subsequently, the stock changed direction and began to move upwards triggered by positive divergence in the daily indicators. With the recent rally, the stock has formed a bullish engulfing candlestick pattern in the weekly chart. This implies a bullish reversal.
The daily relative strength index has entered the neutral region from the bearish zone while the weekly RSI continue to recover from the oversold territory. The daily price rate of change indicator has entered the positive territory implying buying interest.
Taking a contrarian view, we are bullish on the stock from a short-term perspective and expect the current bullish momentum to continue in the coming trading sessions. Targets are ₹376 and ₹383. Traders can buy the stock with a stop-loss at ₹353.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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