Today's Pick - Neyveli Lignite

We recommend a buy in Neyveli Lignite Corporation from a short-term perspective. From the charts of Neyveli Lignite Corporation, we see that the stock was on a medium-term downtrend for almost a quarter (from its early January 2008 high of Rs 273 to its late March low of Rs 101). However, during late March the stock found support at around key psychological level of Rs 100 and began to move up slowly. Thereafter, the stock breached the medium-term down trendline and 21-day moving average. On April 16, the stock surged 4 per cent breaching 50-day moving average. We note that there is an increase in volume over the past five trading sessions. The daily Relative Strength Index (RSI) is on the brink of entering the bullish zone from the neutral region. The weekly RSI took support at 40 levels and it is rising in neutral region. The moving average convergence and divergence is likely to enter the positive territory. Our short-term outlook for the stock is bullish. We expect the stock’s current up-move to prolong to our price target of Rs 159 in the short term. Investor with short-term perspective can buy the stock while keeping the stop-loss at Rs 130.