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Investors with a medium-term perspective can buy the stock of Ashok Leyland at current levels. In March 2020, the stock registered a multi-year low at ₹33 and bottomed out. Since then, it has been in an uptrend It had conclusively breached the psychological resistance at ₹100 in early January this year and continued to go up. But the stock met with a resistance at ₹139 in early February and started to move sideways. Although, it has formed a symmetrical triangle - a bullish continuation pattern.
On Friday, the stock jumped 6 per cent accompanied by extraordinary volume, confirming the pattern. It trades well above the 21- and 50-day moving averages. Also, the daily and the weekly relative strength index (RSI) have entered the bullish zone. Thus, it has potential to reach the price targets of ₹147 and ₹155 over the medium term with a pause at around ₹150. So, traders can buy with stop-loss at ₹120.
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