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The stock of Srikalahasthi Pipes (₹180.6) jumped 5.5 per cent, accompanied by good volume on Friday, closing above the 21-day moving average line. Besides, the stock has formed a hammer candlestick pattern in the weekly chart, which has bullish implications. Recently, the stock took support at a significant medium-term support at around ₹163 and bounced up strongly.
This recent rally provides investors with a medium-term perspective an opportunity to buy the stock at current levels. Following an intermediate-term downtrend, the stock found support at ₹163 in late October 2018. Since then, the stock has been on a medium-term sideways consolidation phase in the wide range between ₹163 and ₹210.
There has been an increase in daily volume over the last four trading sessions. The daily relative strength index has entered in the neutral region from the bearish zone and the weekly RSI is on the brink of entering the neutral region from the bearish zone. Taking a contrarian view, the medium-term outlook is bullish for Srikalahasthi Pipes.
The stock can trend upwards and reach the price targets of ₹200 and ₹210 over the medium term with a minor pause at the key resistance level of ₹200.
Investors with a medium-term perspective can buy the stock with a stop-loss at ₹170 levels.
(This recommendation is based on technical analysis. There is a risk of loss in trading)
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