We recommend a buy in the stock of NIIT Technologies from a short-term perspective. It is evident from the charts of the stock that the stock has been on a medium-term uptrend since its 52-week low of Rs 166, registered in late December 2011. Following a small corrective decline, the stock found support at around Rs 205 in the previous week and resumed its up move.
On Tuesday, the stock conclusively broke through its immediate resistance at Rs 220 by jumping seven per cent with extraordinary volume. While trending higher, the stock breached both its 21- and 50-day moving averages and is hovering well above them. The daily relative strength index is featuring in the bullish zone and weekly RSI has entered into this zone from the neutral region.
The daily moving average convergence-divergence indicator has been steadily moving higher in line with the stock price since late December 2011. Both daily and weekly price rate of change indicators are hovering in the positive terrain implying buying interest.
Considering that the stock's medium-term uptrend line is in tact, we are bullish on the stock. We expect it to move higher and touch our price target of Rs 237 or Rs 244 in the ensuing trading sessions. Traders with short-term perspective can consider buying the stock with stop-loss at Rs 223.5.