We recommend a buy in the stock of Hindustan Copper from a short-term perspective. It is seen from the charts of the stock that following a prolonged sideways consolidation between Rs 240 and Rs 310 from January 2012, it conclusively broke through its lower boundary in November 2012. Subsequently, the stock tumbled with a downward gap and continued its downtrend.

However, after registering a 52-week low at Rs 121.5 on Monday, the stock skyrocketed 10 per cent accompanied by extraordinary volume. This trend reversal is backed with continued positive divergence in the daily relative strength index and moving average convergence divergence indicator. Moreover, the weekly RSI is also displaying positive divergence backing the trend reversal. The stock has breached its 21-day moving average showing initial signs of bullishness.

The daily RSI is moving higher in the neutral region and weekly RSI is recovering from the oversold territory. The daily price rate of change indicator has entered the positive area implying buying interest. Taking a contrarian stance on the stock we are bullish on it from a short-term perspective.

We anticipate its rally to prolong and reach our price target of Rs 143 or Rs 146 in the ensuing trading sessions. Traders with short-term perspective can buy the stock with stop-loss at Rs 134 levels.

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