The stock of Tata Coffee gained 6.3 per cent accompanied by extra-ordinary volume on Tuesday, surpassing a key resistance at ₹112 levels.
This rally provides investors with a short-term perspective an opportunity to buy the stock at current levels. After a minor corrective decline, the stock found support at around ₹100 in late September 2020 and was on a medium term sideways consolidation phase in the band between ₹100 and ₹112 until recently. Moreover, the stock trades well above the 21- and 50-day moving averages.
Over the past three trading session, there has been an increase in volume. The daily as well as the weekly relative strength indices have entered the bullish zone backing the recent up-move. Further, the daily and the weekly price rate of change indicators featuring in the positive terrain implying buying interest.
The short-term outlook is bullish for Tata Coffee. It has strength to extend the current rally to hit ₹118.5 and ₹121. Traders with a short term horizon can buy the stock with a stop-loss at ₹111.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)