Search Now

Recommendations

Wednesday, August 20, 2008

Today's Pick - Balrampur Chini Mills


We recommend a buy in Balrampur Chini Mills from a short-term horizon. It is evident from the charts that the stock has been on a medium-term up trend from its early July trough at Rs 68, forming higher peaks and higher troughs. While trending up, the stock crossed over the 21 and 50-day moving averages. Also it penetrated the intermediate-term down trendline, which was in place since January high of Rs 127.

Moreover, the stock conclusively closed above its 200-day moving average by jumping up almost 8 per cent on August 19. We notice good volume during the up move. The daily relative strength index (RSI) has re-entered into the bullish zone, reinforcing bullishness and the weekly RSI is likely to enter this zone.

We are positive on the stock in the short-term. We anticipate the stock to rally further until it hits our price target of Rs 107 in the forthcoming trading sessions. Traders with short-term perspective can buy the stock while maintaining a stop-loss at Rs 91.