Sterlite Technologies

We recommend a buy in the stock of Sterlite Technologies from a short-term perspective. It is apparent from the charts of the stock that it has been on a steady long-term uptrend forming higher peaks and higher troughs from its January 2009 low of Rs 8.8. However, following a short-term correction from its high of Rs 123 this June, the stock found support retracing 23.6 per cent fibonacci retracement of around Rs 95 in early September. This level is also an important medium-term support level for the stock. On Tuesday, the stock gained 3 per cent closing above its 21-day moving average. We observe that there is an increase in volume in the past two trading sessions. The daily and weekly relative strength indices are rising in the neutral region towards bullish zone. Daily moving average convergence divergence oscillator has signalled a buy and is inching towards positive territory. Taking into consideration the presence of key support and its long-term uptrend still being in place, we are bullish on the stock. We expect it to move up until it hits our price target of Rs 102 or Rs 104 in the upcoming trading sessions. Traders with short-term perspective can buy the stock while maintaining stop-loss at Rs 96.

via BL