We recommend a buy in the stock of Brigade Enterprises from a short-term perspective. It is apparent from the charts of the stock that after taking consistent support at Rs 45 between May and September, the stock started to trend higher. Since then, the stock has been on a medium-term uptrend. In late September, the stock decisively breached its moving average compression (21-, 50- and 200-day moving averages) and is hovering well above its long-term moving average.
On Wednesday, the stock emphatically broke out of a significant resistance at Rs 74 by surging 6 per cent accompanied by above average volume. The daily relative strength index has re-entered the bullish zone from the neutral region and weekly RSI is featuring in this zone. The daily moving average convergence divergence indicator has signalled a buy and is featuring in the positive territory implying upward momentum. Both daily as well as weekly price rate of change indicators are hovering in the positive terrain implying buying interest.
Our short-term outlook on the stock is bullish. We expect its rally to prolong and reach our price target of Rs 80.5 or Rs 82 in the forthcoming trading sessions. Traders with short-term perspective can consider buying the stock while maintaining stop-loss at Rs 75.5 levels.
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