Yoganand D Investors with a contrarian view can consider buying the stock of Tata Power Company at current levels. The stock gained 4.5 per cent on Thursday, accompanied by extraordinary volume.
After trending down over the past three months, the stock recorded a 52-week low at ₹66.6 on July 23 and halted the short-term downtrend. The stock subsequently reversed direction triggered by positive divergence in the daily indicators such as relative strength index and the price rate of change. The recent rally has breached the downtrend-line and the stock has closed above the 21-day moving average. This is showing signs of trend reversal.
The daily RSI has entered the neutral region from the bearish zone and the weekly RSI is recovering from the oversold territory. The daily price rate of change indicator has entered the positive terrain implying buying interest. The near-term outlook is bullish for the stock of Tata Power. Traders can buy the stock with stop-loss at ₹69. Short-term targets are ₹74 and ₹75.5.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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