Ganesh Housing Corp

We recommend a buy in Ganesh Housing Corporation from a short-term trading perspective. It is evident from the charts of Ganesh Housing that after recording as all-time high of Rs 830 in January 2008, it witnessed a sharp decline. The stock fell 96 per cent from its all-time high and found support at Rs 30 in March 2009.

However, we notice formation of a sloping inverse head and shoulders, bottom reversal pattern spanning between November 2008 and April 2009. The volume in this period supports this pattern formation. The stock is trading well above its 21- and 50-day moving averages. On April 17, the stock gained more than 9 per cent and is currently testing the neck line of the reversal pattern.

We also observe that there is an increase in volume over the past three trading sessions. A prolonged positive divergence in the weekly relative strength index and weekly moving average convergence and divergence triggers the reversal.

We are bullish on the stock from a short-term perspective. We expect it to break through the pattern and rally until it hits our price target of Rs 60. Traders with short-term perspective can buy the stock while maintaining a stop-loss at Rs 49.