Thursday, 20 November 2008

Alphageo (Rs 108.05): Buy

We recommend a buy in Alphageo (India) from a short-term perspective. It is apparent from the charts of Alphageo that it has been on a long-term downtrend from its life-time high of Rs 1,078 recorded in early January. Since then, the stock has been forming lower troughs and lower peaks. During mid-September, the stock’s downtrend accelerated and it declined steeply. However, the stock found support at Rs 103 (52-week low) on November 20 and bounced up forming inverted hammer candlestick pattern, which indicates short-term bullishness. We observe that the stock has a significant long-term support at Rs 100 that is 1994 peak and 2006 low. Moreover, we notice that the daily relative strength index is displaying positive divergence and moving average convergence and divergence also is displaying positive divergence. The weekly RSI is hovering in the oversold territory. We take a contrarian view on the stock from a short-term perspective and anticipate it to make a corrective up move until it hits our price target of Rs 120 in the impending trading sessions. Traders with short-term perspective can buy the stock while maintaining a stop-loss at Rs 102.

Source: TheHinduBusinessLine

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DISCLAIMER: The author is not a registered stockbroker nor a registered advisor and does not give investment advice. His comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to buy or sell a stock, option, future, bond, commodity, index or any other financial instrument at any time. While he believes his statements to be true, they always depend on the reliability of his own credible sources. The author recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction, before making any investment decisions, and that you confirm the facts on your own before making important investment commitments.