We recommend a buy in the stock of Ceat from a short-term perspective. It is apparent from the charts of the stock that after taking support at its significant base level at Rs 90 in late March and early April this year, it reversed direction. This reversal was backed by positive divergence in daily moving average convergence divergence and price rate of change indicators. Since then, the stock has been on a medium-term uptrend. Following a 50 per cent fibonacci retracement of its prior up move the stock found support at around Rs 105 last week.

The stock’s 200-day moving average also cushioned the stock are at around Rs 105. Continuing the medium-term uptrend the stock jumped 5 per cent with good volume on Monday.

Our short-term outlook on the stock is bullish. We expect its up move to continue and knock our price target of Rs 117 or Rs 119.5 in the upcoming trading sessions. Traders with short-term perspective can consider buying the stock with stop-loss at Rs 110.2 level.

( Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)