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The stock of Power Finance Corporation (PFC) jumped 5 per cent with good volume on Friday, surpassing a key resistance at ₹100. Over the past two weeks, the stock has been rallying strongly after breaking through a vital resistance at ₹88 in late October 2018. Short-term trend is up.
The stock changed direction, triggered by positive divergence in the weekly relative strength index and price rate of change indicator, after registering a 52-week low at ₹67.6 in mid-July. Since then, the stock has been on a medium-term uptrend.
Interestingly, there has been an increase in weekly volume as well since July. While trending up, the stock breached its 50- and 200-day moving averages in late October, and now trades well above these averages. Both the daily and the weekly relative strength indices feature in the bullish zone. Moreover, the daily and weekly price rate of change indicators hovers in the positive territory, indicating buying interest.
The short to medium-term outlook is bullish for the stock of PFC. As the stock has surged strongly over the past couple of weeks, a minor pause is possible; investors can make use of dips to buy it. The stock can extend its uptrend and reach the target of ₹120 with a minor pause at ₹115 levels. Investors with medium-term perspective can buy the stock in decline while maintaining a stop-loss at ₹93 levels.
(This recommendation is based on technical analysis. There is a risk of loss in trading)
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