Berger Paints

We recommend a buy in Berger Paints India from a short-term perspective. It is apparent from the charts of the stock that after bottoming in October 2008 low of Rs 25.7; it has been on a long-term uptrend forming higher trading zones. However, the stock peaked at Rs 75 in September 2009 and was on corrective downtrend till late October. Subsequently finding support around Rs 55, the stock resumed its uptrend. On December 11, it surged 4 per cent surpassing the immediate resistance level. There has been an increase in volumes over the past two trading sessions. Both monthly and weekly relative strength indices are featuring in the bullish zone and the daily RSI has just entered this zone. The daily as well as weekly moving average convergence and divergence indicators are moving in the positive territory. Considering that the stock's intermediate-term uptrend-line is intact, we are bullish from a short-term horizon. We expect it to rally until it hits our price target of Rs 70. Traders with short-term perspective can buy the stock while maintaining a stop-loss at Rs 60.

via BL