Idea Cellular

We recommend a buy in the Idea Cellular stock from a short-term trading perspective. The stock has been trending up since October 2008 low of Rs 34 as is clearly evident from the charts. In late March 2009, the stock conclusively penetrated its 21 and 50-day moving averages and is trading well above these lines.

On April 21, the stock conclusively broke through the resistance level of Rs 57 by gaining 4 per cent, accompanied with good volume. Moreover, it also surged almost 5 per cent on April 24, reinforcing the bullish momentum. We notice that there is a gradual increase in weekly volumes. The daily relative strength index (RSI) is featuring in the bullish zone and weekly RSI is steadily raising in neutral region towards the bullish zone.

We are bullish on the stock from a short-term horizon. We expect the stock’s up-move to continue further until it hits our price target of Rs 67 in the approaching trading sessions. Traders with short-term perspective can buy the stock while maintaining a stop-loss at Rs 57.