Technical Analysis

Nava Bharat Ventures: Buy

Yoganand D | Updated on May 26, 2019 Published on May 26, 2019



Investors with a medium-term perspective can buy the stock of Nava Bharat Ventures (₹105.9) at current levels. Ever since recording a multi-year high at ₹184.2 in January 2018, the stock has been in an intermediate-term downtrend. Medium-term trend is also down. But the stock recorded a 52-week low at ₹87.9 on May 15 and found support in the long-term support band between ₹88 and ₹90.

Subsequently, the stock changed direction, triggered by positive divergence in the daily relative strength index and price rate of change indicator. Thereafter, it began the trend up and jumped 15.8 per cent, accompanied by good volume in the previous week. This rally has conclusively breached a key resistance at ₹100 and strengthened the short-term bullish momentum.

Besides, the stock had surpassed the 21- and 50-day moving averages and hovers well above them. With the recent strong rally, the stock’s intermediate-term downtrend appears to have come to an end. The stock rebounded from a key long-term support, backed by positive divergence, signalling a change in trend. The short-term trend is up.

The weekly RSI has recovered from the oversold territory and entered the neutral region. Both the daily and the weekly price rate of change feature in the positive terrain, implying buying interest. The medium-term outlook is bullish for Nava Bharat Ventures. The stock can continue to trend up and reach the price targets at ₹117 and ₹125, with a pause at around ₹117. Traders a medium-term view can buy with a stop-loss at ₹96.


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