Redington India (₹138.2)

Investors with a short-term horizon and contrarian view can buy the stock of Redington India at current levels. Following a medium-term downtrend from the November 2017 high of ₹209, the stock found support at a significant long-term base level of ₹130 this week. Moreover, the stock’s 61.8 per cent fibonacci retracement level of the prior uptrend coincides with this support level at ₹130. Taking support from this level, the stock has gained 5 per cent on Thursday. This up move of the stock is triggered by positive divergence in the daily relative strength index.

The daily RSI has been recovering from the oversold territory over the past two months and displaying a positive divergence. Both the daily and weekly price rate of change indicators are also showing positive divergence backing the stock’s upward reversal.

Taking a contrarian view, the near-term outlook is bullish for the stock. It can extend the up move and reach the price targets of ₹144 and ₹147 in the coming trading sessions. Traders can buy the stock with a stop-loss at ₹135.

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

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