Technical Analysis

Praj Industries (₹127.3): Buy

Yoganand D | Updated on May 14, 2019 Published on May 15, 2019

The stock of Praj Industries gained 8.5 per cent accompanied by above average volume on Tuesday, after taking support from a significant long-term base at around ₹117. Investors with a short-term view with a contrarian stance can buy the stock at current levels.

The stock has been in a short-term downtrend since encountering a key resistance at ₹165 in early March. While trending down, the stock breached a key support and extended its decline in early May. However, the stock found support at significant long-term base at around ₹117 on Tuesday and bounded up strongly. The 200-day moving average poised at ₹117 also cushioned the stock.

The daily relative strength index has recovered from the oversold territory and has entered the neural region. The weekly RSI hovers in the neutral region with an upward bias.

Taking a contrarian standpoint, the short-term outlook is bullish for the stock. It can extend the rally and reach the near term price targets of ₹133 and ₹135 in the upcoming trading sessions. Traders can buy the stock with a stop-loss at ₹124.5.

(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)

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