HEG

We recommend a buy in the stock of HEG from a short-term horizon. It is apparent from the charts that the stock has been on a steady long-term uptrend from its March 2009 low of Rs 94, forming higher peaks and troughs. However, in early January 2010, the stock experienced selling interest, encountering resistance at Rs 410. Since then, the stock was on a short-term correction till its recent low of Rs 328. The stock has halted after approximately 50 per cent retracement level of its prior medium-term uptrend that commenced from the November 2009 low of Rs 238. On February 3, the stock bounced up breaching the 21-day moving average by gaining 6 per cent, with above average volume. A minor positive divergence displayed in the daily relative strength index backs this bounce. The daily RSI has entered into the neutral region from the negative territory and weekly RSI is still hovering in the bullish zone. We are bullish on the stock from a short-term perspective. We anticipate it to rally further until it hits our price target Rs 390 in the upcoming trading sessions. Traders with short-term perspective can consider buying the stock while maintaining stop-loss at Rs 336.

via BL