KS Oils

We recommend a buy in the stock of KS Oils from a short-term perspective. It is evident from the charts that after encountering a key long-term resistance in the band between Rs 75 and Rs 77 in January 2010, it started declining. However, this intermediate-term down move was arrested at the stock's significant long-term support zone between Rs 50 and Rs 52 in late July. Subsequently the stock bounced up and has been on a short-term up-move. This trend reversal has been supported by positive divergence displayed in the daily moving average convergence divergence oscillator. On August 19, the stock advance 4 per cent crossing over its 21-day moving average. The volume on that session was good. The daily relative strength index has bounced up from 40 levels and is rising towards bullish zone. The daily MACD has signalled a buy. Our short-term outlook on the stock is positive. We anticipate the stock to rally until it hits our price target of Rs 57.5 or Rs 59 in the upcoming trading sessions. Short-term traders can buy the stock while maintaining stop-loss at Rs 53.

via BL