Investors with a contrarian view can buy the stock of NMDC at current levels. The stock jumped 5.5 per cent accompanied by above average volume on Wednesday, taking support from a key psychological support at ₹100.

After marking a new 52-week high at ₹139.5 in late January this year, the stock changed direction and started the decline. Since then, it has been in a short-term downtrend. On Tuesday, the stock tumbled 6.4 per cent and found support at around ₹100 and had formed a hammer candlestick pattern which is a bullish reversal pattern. Backing this pattern, the stock jumped 5.5 per cent last session, confirming the initial sign of trend reversal.

This rally has almost filled the recent downward gap. Key support in the band between ₹97 and ₹100 is acting as a significant base for the stock. The daily relative strength index is on the brink of entering the neutral region from the bearish zone and the weekly RSI hovers in the neutral region. Moreover, the stock has formed a hammer candlestick pattern in the weekly chart indicating bullish trend reversal.

The near-term outlook is bullish. The stock has the potential to trend upwards in the ensuing trading session and reach the price targets of ₹109.5 and ₹111.5. Traders can buy the stock with a deep stop-loss at ₹101.5.

(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)

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