Investors with a short-term perspective can buy the stock of Ashoka Buildcon at current levels. After encountering a key resistance at ₹117 in late February and early March this year, the stock began the trend downwards. It was on a short-term downtrend until it found support in the -₹77 and ₹80 zone in early May. The base in the band between ₹77 and ₹80 is a long-term support for the stock. Over the past weeks, the stock has been trending up. The stock has surpassed the 21-day moving average recently and trades well above it and 200-day moving averages.
On Monday, the stock gained 4.3 per cent accompanied by extraordinary volume and has conclusively breached a key short-term resistance at ₹87. This rally has strengthened the bullish momentum and the stock is likely to extend the up-move in the ensuing trades sessions. The daily relative strength index is on the brink of entering the bullish zone from the neutral region and the weekly RSI is charting higher in the neutral region. Further, the daily price rate of change indicator is featuring in the positive terrain implying buying interest.
The short-term outlook is bullish for the stock. Targets are ₹95 and ₹97. Traders can buy with a stop-loss at ₹89.
(Note: The recommendations are based on technical analysis. There is risk of loss in trading.)