The short-term outlook for the stock of Ashok Leyland is bullish. The stock has been moving up consistently over the last few days. After surging over 6 per cent last week, the stock has extended the rally over another 4 per cent so far this week. The price action since March r resembles a bull channel. The stock is now moving up towards the upper end of the channel now. Immediate resistance is at ₹151. A break above can take the stock up to ₹158-₹159 – the upper end of the channel in the next two-three weeks. Immediate support will be in the ₹145-₹143 region.
Traders with a short-term perspective can go long at current levels. Accumulate shorts on dips at ₹144. Keep the stop-loss at ₹141. Trail the stop-loss up to ₹149 as soon as the stock moves up to ₹151. Move the stop-loss further up to ₹152 as soon as the stock touches ₹154 on the upside. Book profits at ₹156. The bullish outlook will get negated if the stock breaks below ₹143 decisively. In that case the stock can fall to ₹140 initially and then lower eventually going forward.
(Note: The recommendations are based on technical analysis. There is risk of loss in trading.)