Investors with a short- to medium-term perspective can buy the stock of GAIL (India) at current levels. It gained 6.7 per cent accompanied by above-average volume on Friday, reinforcing the near-term uptrend.
A key resistance at around ₹130 had capped the stock’s up-move in January and in mid-February; subsequently, it resumed the long-term downtrend that had been in place since a recorded in mid-2018. However, the stock found support after recording a multi-year low at ₹65.7 in mid-March.
Triggered by positive divergence in the daily relative strength index (RSI) and the daily price rate of change indicator, the stock changed direction.
Last week, it gained 16 per cent with good volume, and has formed a bullish engulfing candlestick pattern in the weekly chart, which is a bullish reversal pattern.
There has been an increase in daily volume over the past one month.
The daily RSI has entered the neutral region from the bearish zone and the weekly RSI is recovering from the oversold territory. Moreover, the daily price rate of change indicator has entered the positive terrain, implying buying interest.
The stock currently tests a near-term resistance at ₹80 with a positive bias. An emphatic break above this barrier can take it higher to ₹90 and then to ₹95 in the coming trading sessions. Taking a contrarian view, the short- to medium-term outlook appears to be bullish. Investors can buy with a stop-loss at ₹74.
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.