Amara Raja Batteries (Rs 52.90): Buy

We recommend a buy in Amara Raja Batteries from a short-term perspective. It is clearly evident from the charts of Amara Raja Batteries that it has been on a long-term downtrend from its February high of Rs 183. The stock has been forming lower bottoms and lower peaks since then. However, the stock’s downtrend appears to have got arrested around Rs 40, which is a long-term key support level (2001 peak). The stock recently formed a bullish engulfing candlestick pattern, indicating a short-term reversal. On November 3, the stock surged 9 per cent accompanied with good volume. We notice that the daily relative strength index (RSI) is displaying positive divergence and weekly RSI is recovering from deeply oversold territory. Moreover, the daily moving average convergence and divergence is signalling a buy. We are bullish on the stock from a short-term horizon. We expect the stock to move up until it hits our price target of Rs 60 in the forthcoming trading sessions. Traders with short-term perspective can buy the stock while maintaining a stop-loss at Rs 50.

Source: TheHinduBusinessLine