Shree Renuka Sugars

We recommend a buy in Shree Renuka Sugars from a short-term perspective. It is apparent from the charts of Shree Renuka Sugars that after encountering resistance at around Rs 140 in early August, it experienced selling pressure and declined sharply to record a 52-week low of Rs 41 during late October. The stock, however, reversed direction triggered by positive divergence in the daily relative strength index (RSI). Since its 52-week low, the stock has been on a medium-term up trend. Recently Shree Renuka breached its 21-day moving average. Moreover, the stock’s 8 per cent gain on December 12 reinforced its bullish momentum. We note that there is an increase in volume over the past three trading sessions. The daily RSI is on the brink of entering the bullish zone from the neutral region and the weekly RSI is likely to enter the neutral region. We are bullish on the stock from a short-term horizon. We expect the stock to move up until it hits our price target of Rs 69 in the approaching trading sessions. Traders with short-term perspective can buy the stock while maintaining a stop-loss at Rs 58.50.