We recommend a buy in the stock of Voltas from a short-term perspective. It is apparent from the charts of the stock that ever since peaking out at Rs 262 in November 2010, the stock has been on a long-term downtrend. Both intermediate- and medium-term trends are down for the stock. However, after recording a 52-week low at Rs 71.5 on December 29, the stock found support at this level and started to move higher.

This up move has been triggered by positive divergence in daily relative strength index and moving average convergence divergence indicator. Moreover, weekly RSI is displaying prolonged positive divergence backing the stock's reversal. On Monday, the stock jumped 4.6 per cent accompanied by above average volume, breaching its 21-day moving average line. The daily RSI is rising higher in the neutral region towards the bullish zone and weekly RSI is recovering from the oversold territory.

The daily price rate of change indicator has entered into the positive terrain implying buying interest. We take a contrarian stance on the stock from a short-term perspective and are bullish on it. We expect the stock's rally to continue and reach our price target of Rs 83 or Rs 85.5 in the approaching trading sessions. Traders with short-term perspective can consider buying the stock with stop-loss at Rs 78.

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