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Investors with a medium-term horizon can consider buying the stock of Gujarat Gas (₹176.3) at current levels. Last week, the stock jumped 10.9 per cent, accompanied by good volume. It took support in the ₹115-120 (stock-split adjusted) band in October 2018 and in February 2019.
The intermediate-term downtrend had halted at this support and the stock changed direction this February. Since then, it has been in a medium-term uptrend. While trending up, the stock breached key resistance at ₹147 and ₹170. But it met with a key resistance at ₹195 in June and was on a short-term corrective decline until last week. Key support at ₹160 provided base for the stock and it resumed the uptrend.
With the recent up-move, the stock appears to have resumed the medium-term uptrend that continued to be intact. The daily as well as the weekly relative strength indices have entered the bullish zone from the neutral region, backing the uptrend. The medium-term outlook is bullish, it can continue to trend up and reach the price targets of ₹190 and ₹200 in the medium term, with a minor pause at ₹195. Investors with a medium-term view can buy the stock with a stop-loss at ₹163.
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