Lakshmi Overseas Industries

We recommend a buy in Lakshmi Overseas Industries from a short-term perspective. It is evident from the charts of the stock that following a medium-term downtrend from its June peak of Rs 122 halted at the July low of Rs 68. Since then the stock has been on a medium-term uptrend. The counter has a significant long-term support in the range of Rs 62 and Rs 68. While trending upward, the stock surpassed its 21- and 50-day moving averages in late July and is trading way above these averages. On August 12, the stock gained 3 per cent reinforcing the medium-term uptrend. Moreover, the volumes are increasing over the past three trading sessions. The daily relative strength index (RSI) has entered the bullish region and weekly RSI has entered the neutral region from the bearish zone. Our short-term outlook on the stock is bullish. We expect it to rally until it knocks our price target of Rs 104. Traders with a short-term perspective can buy the stock while maintaining a stop-loss at Rs 89.

via BL