HEG

We recommend a buy in the stock of HEG from a short-term trading perspective. It is apparent from the charts of HEG that after encountering resistance at around Rs 293 in August 2008, it resumed its downtrend. Since then, the stock was on an intermediate-term downtrend till it found support at Rs 102 in late January 2009. A significant long-term support is present at Rs 100 for the stock. We observe the formation of a falling wedge pattern, spanning the period from late October. The stock is currently testing the upper resistance level of the pattern. The daily moving average convergence and divergence indicator is displaying positive divergence. The weekly relative strength index also is displaying a prolonged positive divergence. Moreover, the price rate of change indicator is rising in the positive territory indicating buying interest. We are bullish on the stock from a short-term horizon. We anticipate it to penetrate the upper resistance level and move up until it hits our price target of Rs 119. Traders with short-term perspective can buy the stock while maintaining a stop-loss at Rs 101.

via BL