Dhampur Sugar Mills (Rs 77.65): Buy

>> Wednesday, August 12, 2009

We recommend a buy in Dhampur Sugar Mills from a short-term perspective. It is evident from the charts of the stock that it has been trending upwards since November 2008 low of Rs 19.50. Since then, it has been forming higher peaks and higher troughs. In mid-July, the stock took support around Rs 50 and bounced resuming its long-term uptrend. The stock surpassed a medium-term resistance around Rs 72last week and is currently trading well above 21- and 50-day moving averages. The intermediate-term uptrend from March low is intact. We notice that there is an increase in weekly volume over the past four weeks. Both daily and weekly relative strength index (RSI) are featuring in the bullish zone. The daily as well as weekly moving average convergence and divergence indicators are hovering in the positive territory. Our short-term outlook is bullish on the stock. We anticipate it to move up until it hits our price target of Rs 85. Traders with a short-term perspective can buy the stock while maintaining a stop-loss at Rs 73.

Source : Hindu Business Line