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Investors with a short-term perspective can buy the stock of Chennai Petroleum Corporation at current levels. The stock has been in a medium-term uptrend since it took support at around ₹64 in October 2020. In early December 2020, the stock had emphatically breached a key crucial resistance at ₹90 that had subsequently turned into a vital base level and cushioned it in late December 2020 and January this year.
The stock continued to trend upwards thereafter and breached an immediate resistance at ₹100 in the past week. On Monday, the stock extended the on-going rally by gaining 11.9 per cent with good volume and has surpassed a barrier at ₹110 decisively. It now has potential to extend the rally in the ensuing trading sessions. Moreover, the stock trades well above the 21- and 50-day moving averages. There has been an increase in volume over the past one week. The daily relative strength index has re-entered the bullish zone from the neutral region and the weekly RSI also features in the bullish zone.
Overall, the short-term outlook is bullish for the stock. Targets are ₹126 and ₹128. Traders can buy the stock with a stop-loss at ₹118.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading)
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