Technical Analysis

Sterlite Technologies (₹231.9): Buy

Yoganand D BL Research Bureau | Updated on February 19, 2019 Published on February 20, 2019

The stock of Sterlite Technologies gained 6 per cent accompanied by an above average volume on Tuesday, witnessing buying interest. Traders with a contrarian view can buy the stock at current levels.

Following a medium-term downtrend, the stock found support at around ₹207 in early February. The stock recorded a 52-week low at ₹181 on February 12 and bounced forming a hammer candlestick pattern. This is a bullish reversal pattern. Subsequently, the stock changed direction and began to trend upwards triggered by a positive divergence both in the daily relative strength index as well as the price rate of change indicator.

There has been an increase in volume traded over the past four weeks. The daily RSI has entered the neutral region from the bearish zone and the weekly RSI is recovering from the oversold territory. Also, the daily price rate of change indicator has entered the positive territory implying buying interest.

The short-term outlook is bullish for the stock. Targets are ₹241 and ₹246. Buy the stock with a stop-loss placed at ₹226.5.

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

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