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Investors with a short-term perspective can buy the stock of Patel Engineering at current levels. The medium-term downtrend that was in place from the December 2014 peak of ₹122 halted at around ₹70 last month. Since then, the stock has been on near-term uptrend. While trending northwards, the stock has decisively breached its 21- and 50-day moving averages. On Thursday, the stock surged 7 per cent breaking a key medium-term resistance level of ₹84. This breakthrough reinforces near-term bullish momentum.
The daily relative strength index is on the brink of entering the bullish zone from the neutral region. Other indicators on the daily chart have signalled a buy. Overall, the short-term outlook for the stock is bullish. It has potential to trend upwards and reach our price target of ₹92 and then ₹94 in the ensuing trading sessions. Buy the stock with a stop-loss at ₹86.5.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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