Torrent Power (₹245.1): Buy

The stock of Torrent Power jumped 4 per cent accompanied by above average volume, breaking above a key resistance at ₹240 on Tuesday. This breakthrough gives traders with a short-term perspective an opportunity to buy the stock at current levels.

After a short-term downtrend in early 2018, the stock found support in the ₹210-220 band in late March this year. Since then, the key support in the ₹210-220 band has been consistently providing base for the stock. Taking support from this band the stock bounced up in early October and began to move upwards.

It has been on a near term uptrend over the last two weeks. While trending up, the stock breached its 21- and 50-day moving averages and currently hovers well above them. The daily relative strength index is on the brink of entering the bullish zone from the neutral region and the weekly RSI is charting upwards in the neutral region. Both the daily and weekly price rate of change indicators feature in the positive territory implying buying interest.

Overall, the short-term outlook is bullish for the stock. Targets are ₹255 and ₹260. Traders can buy with a stop-loss at ₹240.

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

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