Chart Focus: PG Electroplast (₹125.2): Buy

Investors with a medium-term perspective can buy the stock of PG Electroplast (PGEL) at the current price level. Since encountering a key resistance at ₹450 in January 2018, the stock has been on a long-term downtrend, forming lower peaks and troughs. However, it found support at ₹86 in November 2018 and again in December at this level.

Subsequently, the stock changed direction, triggered by positive divergence in the daily as well as weekly relative strength index. Since then, it has been on a short-term uptrend. Last week, the stock skyrocketed 18 per cent, accompanied by extraordinary volume, breaching a key resistance at ₹110. Moreover, the stock has also surpassed its 21- and 50-day moving averages and trades well above them.

There has been an increase in volume over the past one month. The daily relative strength index features in the bullish zone, backing the bullish momentum. The weekly RSI has recovered from the oversold territory and features in the neutral region. Further, the daily price rate of change indicator hovers in the positive terrain, implying buying interest.

The medium-term outlook is bullish for PGEL. The stock can continue to trend up and reach price targets of ₹140 and ₹145 over the medium term, with a minor pause at ₹135 in the coming weeks. Investors with a medium-term perspective can buy the stock with a stop-loss at ₹115 levels.

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