Todays Pick - HCC

From a short-term perspective we recommend a buy in Hindustan Construction Company. It is evident from the charts that the stock had been on a medium-term sideways consolidation in the range of Rs 111 and Rs 140 (from mid March 2008 to early May 2008).

However, on May 5, the stock made an upward breakout of the sideways consolidation and also crossed over the 50-day moving average by jumping up almost 6 per cent. We note that the volume has been increasing for the past five trading sessions.

The daily momentum indicator is testing 60 level and it is on the verge of entering the bullish zone. The daily moving average convergence and divergence is likely to enter the positive territory.

Considering the stock’s recent breakout, we are bullish on the stock for the short-term. We expect the stock to move up to our price target of Rs 163 in the forthcoming sessions.

Investor with short-term perspective can buy it while keeping the stop-loss at Rs 135 level.

via BL