Punj LLoyd

We recommend a buy in Punj Lloyd stock from a short-term trading perspective. It is apparent from the charts of Punj Lloyd that it was on an intermediate-term downtrend from a significant resistance level of Rs 310 encountered in late September 2008 to March low of Rs 66.

The March low is also a 52-week low for the stock. However, the stock reversed its trend triggered by the positive divergence displayed in the daily relative strength index (RSI) and the daily moving average convergence and divergence. The stock breached its intermediate-term down trend-line in the recent time and has been on a short-term uptrend since its 52-week low.

While trending up, the stock crossed over the 21 and 50-day moving averages. On March 27, the stock gained 10 per cent, accompanied with heavy volume. The daily RSI has entered in the bullish zone and the weekly RSI is rising in the bearish zone towards the neutral region. From a short-term perspective we are bullish on the stock.

We expect it to rally further until it hits our price target of Rs 100 in the upcoming sessions. Traders with short-term perspective can buy the stock while maintaining a stop-loss at Rs 85