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The stock of Somany Ceramics has gained 8 per cent accompanied by above average volume on Thursday, bouncing up from a key support level of ₹200. This rally provides traders with a short term perspective an opportunity to buy the stock at current levels. Since the stock took long-term support in the band between ₹80 and ₹87 in late May this year, it has been in an intermediate term uptrend. While trending up, the stock had decisively breached a key resistance at ₹200 in mid-October which subsequently turned into a vital support and provided base this week.
The stock trades well above the 50- and 200-day moving averages. With the recent rally, the short-term uptrend appears to be resumed and the stock can continue to trend upwards. The daily relative strength index has entered the bullish zone from the neutral region and the weekly RSI continues to feature in the bullish zone backing the uptrend.
Overall, the short-term outlook is bullish for the stock. It can trend upwards and reach the price targets of ₹230 and ₹234 in the short term. Traders can buy with a stop-loss at ₹215.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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