Technical Analysis

Uttam Sugar Mills (₹131.2): Buy

Yoganand D BL Research Bureau | Updated on July 17, 2019 Published on July 17, 2019

The stock of Uttam Sugar Mills jumped 10.5 per cent on Tuesday, surpassing a key resistance at ₹125. This recent rally provides an opportunity to buy for traders with a short-term perceptive. After encountering a key resistance at ₹160 in early March, the stock witnessed a short-term downtrend. But, a key support at around ₹110 had arrested the stock’s decline in mid-May this year. Since then, the support continues to cushion the stock and has limited the downside well.

In early July, the stock took support from this base and changed direction. Last week, the stock had decisively breached its moving average compression (21-, 50- and 200-day moving averages) at around ₹117. The stock hovers well above the 200-day moving average. There has been an increase in daily volume over the past three trading sessions.

The daily relative strength index has entered the bullish zone from the neutral region and the weekly RSI is charting upwards in the neutral region. Further, the daily and the weekly price rate of change indicator hover in the positive terrain implying buying interest. Short-term targets are ₹136.5 and ₹139.5. Traders can buy with a stop-loss at ₹128.

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

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