Today's Pick - Ambuja Cements

We recommend a buy in Ambuja Cements from a short-term perspective. From the charts of Ambuja Cements we see that the stock has been on an intermediate-term downtrend from its life-time high of Rs 160 (recorded on December 4, 2007). However, this downtrend got arrested at around Rs 70 two weeks back and reversed direction. We also note that this down trend has retracted 61.8 per cent fibonacci retracement level of its prior long-term bull run and has found support recently. The stock has been moving up from early July. This reversal has been supported by positive divergence in daily relative strength index (RSI) and daily moving average convergence and divergence (MACD). The daily RSI is rising in the neutral zone and the weekly RSI has recovered from the oversold region. The MACD is signalling a buy. The stock crossed over the 21-day moving average on July 14. We are bullish on the stock in the short-term. We expect the stock’s current up move to continue until it hits our price target of Rs 92 in the approaching trading sessions. Traders with short-term perspective can buy the stock while maintaining stop-loss at Rs 78.

via BL