Technical Analysis

Today's Pick: Uflex (₹393.2)

Yoganand D | Updated on February 07, 2018 Published on February 07, 2018

The stock of Uflex gained 8 per cent with good volume on Wednesday. Investors with a short-term perspective and high-risk appetite can consider buying the stock at current levels. Following a medium-term uptrend the stock encountered a key resistance at ₹500 in late December and changed direction. Since then, the stock has been in a short-term downtrend.

While trending down the stock witnessed a sharp fall during last week and also in early part of this week. However, the stock found support at around ₹350 and formed a bullish hammer candlestick pattern on Tuesday. Following this pattern the stock witnessed a strong rally last session. Moreover, this reversal coincides with a key long-term support in the band between ₹350 and ₹370.

The daily relative strength index is recovering fromoversold territory. With the recent rally the stock is forming a bullish hammer reversal pattern in the weekly chart backing the current trend reversal. Taking a contrarian view we are bullish on the stock from a short-term perceptive. Short-term targets are ₹410 and ₹417 . Buy the stock with a stop-loss at ₹385.

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

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