Ahmednagar Forgings

Ahmednagar Forgings is in a strong intermediate-term uptrend since the November 2008 low of Rs 19.9. What is more interesting is the steep climb in this stock since the beginning of this year. The stock more than doubled in value as it recorded the peak of Rs 147 on March 22. There has however been a slight let-up in the medium-term momentum since this peak, and the stock is currently in a short-term correction.

This correction however halted after retracing 30 per cent of the most recent leg of the intermediate-term up-move. After spending three weeks consolidating above the support at Rs 124, the stock spiked higher on Wednesday accompanied by good volumes. The stock recorded a strong close above its 50-day moving average as well as the short-term down-trend line on Wednesday signalling an end to the current correction. The 10-day rate of change oscillator has just moved in to the positive zone while the daily moving average convergence divergence oscillator is resting on the zero line. The morning star pattern in the daily chart is another factor in the stock's favour.

Traders with short-term perspective can buy the stock with stop at Rs 126. It can move up to Rs 135 or Rs 138 in the days ahead.

via BL