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The stock of Intellect Design Arena surged 7 per cent, breaching an immediate resistance at ₹114 on Wednesday. The stock had been in an intermediate- as well as medium-term downtrend. However, it found support after touching a 52-week low of 107.7 in mid-February. Subsequently it traded sideways in a narrow range for more than two weeks and eventually broke this sideways movement on Wednesday. Daily volumes have perked up over the past two weeks. The daily relative strength index has entered the neutral region from the bearish zone, while the weekly RSI is recovering from the oversold levels.
The stock is now testing an immediate resistance at around ₹121. Taking a contrarian stance, we believe the stock has potential to breach the immediate resistance and trend upwards. The short-term targets are ₹124.5 and ₹127. Traders with high-risk appetite can buy the stock with stop-loss at ₹116.5.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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