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Investors with a short-term perspective can buy the stock of Andhra Sugars at current levels. Following an intermediate-term downtrend from the August 2014 peak of ₹159, the stock found support in the band between ₹88 and ₹90 in late March 2015. Again the stock tested its long-term support zone between ₹88 and ₹90 in recent times and bounced up. Triggered by positive divergence in daily relative strength index and price rate of change indicator, the stock changed direction and surged 7.7 per cent with good volume on Wednesday.
The daily RSI has entered the neutral region from the bearish zone and weekly RSI is likely to enter the neutral region from the bearish zone. As the stock is reversing higher from a significant long-term support band between ₹88 and ₹90 and the bullish momentum is emerging, there is a strong probability that the current up move will continue. Targets are ₹99.5 and ₹101.5. Traders can buy the stock with a stop-loss at ₹93.5.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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