Lanco Infratech

We recommend a buy in Lanco Infratech from a short-term perspective. It is apparent from the charts that the stock has been on longer term uptrend since its all-time low of Rs 8.3 recorded in October 2008. However, the stock met with a key resistance around Rs 60 in December 2009 and was on a medium-term countertrend until it found significant support around Rs 41. This countertrend had approximately retraced 38.2 per cent fibonacci retracement of the stock's prior up move. Subsequently, the stock rebounded taking support from Rs 41. It appears to have resumed the uptrend as it penetrated the immediate resistance at Rs 46 by gaining almost 7 per cent on February 9. We observe that there is an increase in volumes over the past two sessions. The daily relative strength index has entered the neutral region from the negative zone and weekly RSI is featuring in the neutral region. Moreover, the daily moving average convergence and divergence indicator has signalled a buy. We are bullish on the stock from a short-term perspective. We anticipate it to moving up until it hits our short-term price target of Rs 54.5. Traders with short-term perspective can consider buying the stock while maintaining stop-loss at Rs 46.5.

via BL