Our pick for the day is buy recommendation on the stock of Educomp Solutions from a short-term perspective. It is evident from the charts of the stock that following a broad sideways movement between Rs 130 and Rs 175, the stock made a downward breakthrough in late January this year. In late February, the stock plunged 25 per cent in a week.
Medium-term trend is down from the stock. However, after marking the 52-week low at Rs 72 on Tuesday, the stock started moving higher, knocking the oversold levels in the daily Bollinger Bands. On Thursday, the stock jumped 7 per cent accompanied by above average volume. We observe that there is an increase in daily volume in the past eight trading sessions.
The daily indicators are recovering from the deep oversold levels but weekly indicators are still featuring in the oversold area signalling a potential recovery in the stock price. We expect the stock's up move to prolong and reach our price target of Rs 86 or Rs 88 in the ensuing trading sessions. Traders with short-term perspective can consider buying the stock with stop-loss at Rs 80.6 levels.