Investors looking for a contrarian buy can consider the stock of Balrampur Chini Mills at current levels. Following a short-term downtrend from the resistance level of ₹55, the stock took support at around ₹40 last week. The stock has a significant long-term support at ₹37-40 levels from where it had reversed higher in late June. Moreover, the stock has repeated the reversal now gaining almost 8 per cent with good volumes on Thursday. This upward reversal is backed by a positive divergence in the daily price rate of change indicator.
The daily relative strength index has entered the neutral region from the negative territory. Taking into consideration the stock’s reversal from a significant long-term support level with bullish momentum, we take a contrarian stance. The stock can extend its rally and reach the price targets of ₹44 and ₹45 in the forthcoming trading sessions. Buy the stock with a stop-loss at ₹41.3
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