We recommend a 'buy' in Nahar Industrial Enterprises from a short-term trading perspective. The stock is in a medium-term downtrend since the January peak of Rs 88.7. As this downtrend is already five months old, it could be close to termination. The stock is currently poised at key support zone between Rs 55 and Rs 60 that occurs close to 38.2 per cent retracement of its up-move from the March 2009 low.
That the stock rebounded 5 per cent from this zone on Wednesday implies a positive short-term bias. The 14-day relative strength index reversed higher on Wednesday and is trying to move away from the bearish zone. The 10-day rate of change oscillator moved above the zero line in the last session.
However, as the medium-term trend continues to be down, this call is meant only for those traders who have a greater penchant for risk. The stock can be bought with the stop-loss at Rs 57. Short-term targets for the stock are Rs 62 and then Rs 65.
Lokeshwarri S. K.
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