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The stock of Chennai Petroleum Corporation gained 4.5 per cent with good volume on Tuesday, breaking above a key resistance level of ₹392. Since taking support at around ₹65 in March 2015, the stock has been on a long-term uptrend. Medium-term trend is also up for the stock.
In February, the stock encountered a key resistance at ₹392 and started to move sideways in a narrow band between ₹360 and ₹392. The recent rally has taken the stock out of this sideways movement. The stock appears to have resumed its medium term uptrend. It trades well above its 21- and 50-day moving averages. The daily relative strength index has entered the bullish zone from the neutral region and the weekly RSI continues to feature in the bullish zone. Both the daily and weekly price rate of change indicators are hovering in the positive territory implying buying interest.
The short-term outlook is bullish for the stock of Chennai Petroleum Corporation. It can extend its uptrend and reach the price target of ₹413 and ₹422 in the upcoming trading sessions. Traders with a short-term horizon can buy the stock with a stop-loss at ₹388.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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