Hindustan Oil Exploration

We recommend a buy in the stock of Hindustan Oil Exploration Company from a short-term perspective. It is evident from the charts of the stock that after bottoming in March low of Rs 44 the stock has been on an intermediate-term uptrend. In June the stock's uptrend accelerated and after breaking through the long-term resistance at Rs 170 the stock recorded an all-time high of Rs 398 in September. Since then, the stock had been on a medium-term corrective downtrend till it found support at Rs 260 in mid December. This corrective decline has resembled a falling wedge pattern, a bullish continuation pattern. On December 30, the stock broke through this pattern by gaining 10 per cent accompanied with good volume. Moreover, it has penetrated downtrend-line as well as 21 and 50-day moving averages. The daily relative strength index (RSI) has entered the bullish zone from the neutral region and weekly RSI is heading towards this zone. Our short-term outlook on the stock is positive. We expect it to move up until it hits our price target of Rs 328. Traders with short-term perspective can consider buying the stock while maintaining a stop-loss at Rs 281.

via BL