Balrampur Chini Mills

We recommend a buy in Balrampur Chini Mills from a short-term perspective. The stock has been in a strong short-term uptrend from December 2, 2008 when it formed the low at Rs 29.7. It gained more than 80 per cent from this trough and is currently in a corrective down trend.

After correcting about 50 per cent of the prior up-move, a fresh up-move appears to be unfolding currently. This leg of the up-move is likely to take the stock beyond its recent peak. The short-term trend line at Rs 45 should act as a reliable support in declines.

The 14-day relative strength index (RSI) is bouncing off the 50 level implying that the short-term up trend can continue further. Buy signals in the weekly oscillators too denote strength in the stock. Short-term traders can buy the stock with a stop at Rs 48. The stock can move to Rs 55 in the immediate future.

via BL