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The stock of Dalmia Bharat Sugar and Industries skyrocketed almost 17 per cent with above average volume on Thursday, breaking above a key resistance at around ₹108. This rally provides traders with a short-term perspective an opportunity to buy the stock at current levels.
Encountering a key resistance in the band between ₹130 and ₹134 in January, the stock started to decline. Last week it plummeted breaking a vital support at ₹108. However, it found support at ₹95 during this week and changed direction triggered by positive divergence on the daily relative strength index and price rate of change indicator.
Significant long-term support at around ₹95 and the 200-DMA at ₹100 had cushioned the stock recently. It trades well above the 50- and 200-DMAs. The daily relative strength index has entered the neutral region from the bearish zone and the weekly is likely to re-enter the bullish zone from the neutral region.
With the recent rally, the stock appears to have resumed its medium-term uptrend that has been in place since last December low of ₹82. The short-term view is bullish for the stock. It can continue to trend upwards and reach the price targets of ₹118 and ₹120. Traders can buy the stock with a stop-loss at ₹110.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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