Great Offshore

We recommend a buy in Great Offshore for a short-term horizon. It is evident from the charts of Great Offshore that after encountering resistance around Rs 550 in late September, it has seen a steep decline.

However, in early October, the stock found support around Rs 250 and began to consolidate sideways. We notice formation of a falling wedge pattern, spanning the period since October. This pattern is a bullish pattern and acts as a reversal pattern in this stock, as the falling wedge slopes down with its prevailing downtrend.

On January 28, the stock broke out of this pattern by gaining 13 per cent, accompanied with good volume. The daily relative strength index (RSI) is rising in the neutral region towards the bullish zone. Moreover, weekly RSI is displaying prolonged positive divergence and is on the brink of entering the neutral region. We are bullish on the counter from a short-term horizon. We anticipate the stock to move up until it hits our price target of Rs 283. Traders with short-term perspective can buy the stock while maintaining a stop-loss at Rs 243.