Investors looking for a contrarian buy can consider the stock of VIP Industries at current levels. On Wednesday, the stock gained 4.7 per cent accompanied by above average volume, breaching the 21-day moving average.
Since October 2018, the stock has been in a sideways consolidation phase in a wide range between ₹400 and ₹540. Following a near-term decline, the stock found support at ₹400 last week. Subsequently, the stock changed direction and began to move upwards, triggered by positive divergence in the daily relative strength index. In the last two trading sessions, the stock has surged 6.3 per cent with good volume.
The daily RSI has entered the neutral region from the bearish zone and the weekly RSI continues to hover in the neutral region. The daily price rate of change indicator features in the positive territory implying buying interest. The stock has reversed higher from the lower boundary of the sideways range.
The short-term outlook is bullish for the stock. Targets are ₹460 and ₹468 . Traders can buy with a stop-loss at ₹432.5.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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