Kirloskar Brothers

We recommend a buy in Kirloskar Brothers stock from a short-term trading perspective. It is evident from the charts of Kirloskar Brothers that it had been on a long-term downtrend from its January 2008 high of Rs 520 to its January 2009 low of Rs 59. However, the stock reversed direction, triggered by prolonged positive divergence displayed in the weekly relative strength index (RSI) as well as weekly moving average convergence and divergence (MACD) indicator. The stock ha s been on a medium-term uptrend from its January low.

On February 27, the stock conclusively broke through its long-term down trendline and 50-day moving average by gaining 10 per cent, with heavy volumes.

The daily RSI has entered in to the bullish zone and the weekly RSI has entered in to the neutral region from the bearish zone. The daily MACD is on the verge of entering in to the positive territory.

Our short-term forecast is bullish on the stock. We expect it to move up until it hits our price target of Rs 89 in the upcoming trading sessions. Traders with short-term perspective can consider buying the stock while maintaining a stop-loss at Rs 76.