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Investors with a short-term horizon can buy the stock of Kirloskar Ferrous Industries at current levels. The stock has been in an intermediate-term downtrend since registering a 52-week high at ₹121.9 in early January this year. However, the stock found support in the band between ₹78 and ₹80 in late July and early August. Subsequently, the stock changed direction and has been in a short-term uptrend since then.
During this up-move, the stock had decisively breached its 21- and 50-day moving averages in late August. On Wednesday, the stock jumped 8.4 per cent accompanied with an extraordinary volume, breaching its 200-DMA and a key resistance at ₹94. The daily relative strength index is featuring in the bullish zone. Further, the daily price rate of change indicator is hovering in the positive territory implying buying interest. Though the stock could pause at the psychological resistance at ₹100, it is expected to be shortlived.
The short-term outlook is bullish which can lead to an eventual break above ₹100. Short-term targets are ₹103 and ₹106. Traders can buy at current levels and also on dips with a stop-loss at ₹97.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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