The stock of Gujarat Gas has witnessed a fresh breakout on Tuesday, turning the outlook positive. Since the breakout has occurred after a consolidation period of five years, the stock will most likely see a strong rally from the current level. Hence, traders seeking short-term opportunities can consider going long in the scrip.
Before entering the consolidation phase, the stock had advanced from about ₹200. That is, the stock had registered a low of ₹190.5 in late March as it faced a deep price correction following the broader market crash. However, the stock was quick enough to recover and by early July this year, the stock touched ₹330.
Following this, the stock lost traction and started to move in a sideways trend, largely fluctuating between ₹280 and ₹330. Now that the price has breached ₹330, the likelihood of further appreciation looks high. Supporting the positive view, the relative strength index and the moving average convergence divergence indicators are showing renewed bullishness.
Hence, traders can buy the stock with stop-loss at ₹330 with a potential target of ₹354.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)