NIIT Technologies

We recommend a buy in NIIT Technologies from a short-term horizon. It is apparent from the charts that the stock has been on a long-term uptrend from its all-time low of Rs 42.5 touched in March 2009. Since then, the stock has been forming higher peaks and higher troughs, penetrating key resistance levels. However, after rallying near Rs 200 the stock encountered resistance in mid-January 2010 and started to decline. A significant longer term support around Rs 160 arrested the stock's decline by providing support. Subsequently, the stock took support and rebounded gaining more than 7 per cent, accompanied with high volume. Moreover, with small blip the stock managed to close above the long-term uptrend-line which is still intact. The daily relative strength index (RSI) entered the neutral region from the bearish zone and weekly RSI has re-entered the bullish zone. Considering that the long-term support and uptrend is strong, we are positive on the stock from a short-term perspective. We expect its upward journey to continue until it hits our price target of Rs 187. Traders with short-term perspective can consider buying the stock while maintaining stop-loss at Rs 161.5.

via BL