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Investors with a short-term horizon can buy the stock of Hindustan Petroleum Corporation at current levels. The stock has been in a corrective decline , since recording a new high of ₹493 (adjusted) in early September. However, the stock found support at a key base zone between ₹400 and ₹405 in late September and again in early December. Triggered by positive divergence in daily moving average convergence divergence indicator, the stock reversed direction last week. It started the trend upwards.
On Thursday, the stock gained 3.3 per cent with an above average volume, breaching a key immediate resistance at ₹430 as well as the 50-day moving average. There has been an increase in daily volume over the past five trading sessions. The daily price rate of change feature in the positive territory implying buying interest.
Both the daily and weekly relative strength indices are on the brink of entering the bullish zone from the neutral region. The short-term outlook is bullish. The stock can extend its rally and hit the price targets of ₹455 and ₹464 in the short term. Buy the stock with a stop-loss at ₹428.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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