Technical Analysis

RCF (₹64.1): Buy

Yoganand D BL Research Bureau | Updated on May 28, 2019 Published on May 28, 2019

Investors with a short-term view can buy the stock of Rashtriya Chemicals and Fertilizers (RCF) at current levels. The stock found support at ₹51 in late February and reversed direction. Since then, the stock has been in a medium-term uptrend. After a corrective decline, the stock found support at ₹55 in mid-May and resumed the uptrend. While trending up, the stock had decisively breached a key immediate resistance at ₹58 last week.

On Monday, the stock extended the rally and gained 6 per cent accompanied by above average volume breaking above a key resistance at ₹62 as well as the 200-day moving average decisively. With this rally, the stock has strengthened the medium-term uptrend. It hovers well above the 50- and 200-day moving averages. There has been an increase in daily volume over the past three trading sessions.

The daily relative strength index hovers in the bullish zone and the weekly RSI is likely to enter this zone from the neutral region. Both the daily and weekly price rate of change indicators feature in the positive terrain implying buying interest.

Short-term outlook is bullish for the stock. It can extend the rally and reach the price targets at ₹66.5 and ₹68 in the ensuing trading session. Buy with a stop-loss at ₹62.5.

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

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