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The stock of National Aluminimum Company (Nalco) was resilient and fell marginally in the previous week. However, the stock found support in the band between ₹61 and ₹64 and bounced up sharply this week. In last two trading sessions, the stock has surged almost 11 per cent and it has decisively breached its 50- and 200-DMAs.
Since early January, the stock has been in a broad sideways consolidation phase in the range between ₹61 and ₹80. With the recent reversal from the lower boundary, the stock could continue to trade in this sideways range and possibly test the upper boundary in the short to medium term. The daily relative strength index has begun to trend higher in the neutral region towards the bullish zone and the weekly RSI continues to hover in the neutral region.
The daily price rate of change indicator is on the brink of entering the positive terrain implying buying interest is emerging while the weekly indicator continues to feature in the positive territory. Overall, the near-term outlook appears bullish for Nalco. Investors with a near-term perspective can buy the stock with a stop-loss at ₹67.5. Targets are ₹72.5 and ₹74.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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