Amtek Auto

We recommend a buy in Amtek Auto stock from short and medium-term perspective. It is evident from the charts of Amtek Auto that following a breakthrough of the significant support at Rs 150 in October 2008, the stock witnessed sharp sell-off. It breached the significant support at Rs 100 during this decline.

The decline finally halted at Rs 42 in late November, which is also a 52-week low. The stock has been on an intermediate-term uptrend since then, forming higher tops and higher lows. The 21 and 50-day moving averages were penetrated in early February 2009 and the stock is trading well above these averages currently.

On 26 February, 7 per cent surge was recorded, accompanied with very high volume. This gain has reinforced its bullish momentum. The daily relative strength index is featuring in the bearish zone and the weekly RSI is on the brink of entering the neutral region from the bearish zone.

We are bullish on the stock from both short as well as medium-term perspective. Traders with a medium-term perspective can buy with a stop at Rs 59, with the target at Rs 100. Target for short-term is Rs 82 and the stop-loss for this time-frame should be at Rs 70.