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On Monday, JK Tyre & Industries gained 4.8 per cent accompanied by above average volumes. This upmove has occurred at a significant long-term support level at ₹140, implying an important reversal. Investors with a short-term perspective can consider buying the stock at current levels. Moreover, the recent reversal is backed by positive divergence in the daily relative strength index.
The stock has only retraced 38.2 per cent of the Fibonacci retracement level, indicating that the medium-term uptrend is intact. This retracement level coincides with the key support at ₹140. The price rate of change on the daily chart is displaying a positive change supporting the trend reversal. The weekly RSI is likely to enter the bullish zone from the neutral region. Other weekly indicators are featuring in the positive zone, implying bullish momentum. The stock’s recent reversal and the presence of a significant long-term support indicate a bullish short-term outlook. The stock can extend its rally and reach the target of ₹153 and then ₹156 in the ensuing trading sessions. Buy the stock with a stop-loss at ₹144.
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