Today's Pick - Great Offshore

We recommend a buy in Great Offshore from a short-term perspective. It is clearly visible from the charts of the stock that it has been on a modest medium-term uptrend (forming higher peaks and higher troughs) from its March 2008 low of Rs 560 level.

This up trend gained strength in mid-April as the stock penetrated its medium-term down trend line and also moved above the 21-day moving average. There has been a conclusive breakout on May 8 on which day the stock penetrated the 50-day moving average and gained 5 per cent. Volume was strong during this medium-term uptrend.

The daily relative strength index has entered the bullish zone. Moreover, the daily moving average convergence and divergence is on the verge of entering the positive territory. Our short-term forecast for the stock is bullish. We expect the stock’s medium-term uptrend to continue until it hits our price target of Rs 800 in the upcoming sessions. Investors with short-term perspective can buy the stock while keeping the stop-loss at Rs 667.