Today's Pick - Century Textiles

We recommend a buy in Century Textiles and Industries from a short-term perspective. From the charts of the stock, we note that it has been on an intermediate-term downtrend, since its 52-week high of Rs 1,275, recorded in early January 2008. However, the stock found support just above the key long-term support level of Rs 500, where the 200-day moving average is positioned and reversed. This reversal was very sharp and the stock surged up 7 per cent with above-average volume on Wednesday. We see that there is an increase in volume traded over the past two trading session. We notice a positive divergence in the daily relative strength index that indicates the short-term bullishness. The daily moving-average convergence and divergence is also displaying positive divergence thus supporting our bullish stance. We expect the stock to move up until it hits our price target of Rs 640 in the forthcoming trading sessions. Traders with short-term perspective can buy the stock, while maintaining stop-loss at Rs 550

via BL