Buy Goodyear ::Business Line

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We recommend a buy in the stock of Goodyear India from a short-term perspective. It is apparent from the charts of the stock that after retracing 61.8 per cent Fibonacci retracement level of its prior up move from February low of Rs 203 to its July peak of Rs 375, the stock found support around Rs 270 in late November. This level is also a key long-term support level.

The stock subsequently continued its up move triggered by the positive divergence in the daily moving average convergence divergence indicator. The stock has been on a short-term uptrend since its November trough at around Rs 270. On Wednesday, the stock penetrated its significant immediate resistance level at Rs 290 by gaining 3.7 per cent with above average volume. Moreover, the stock managed to close above its 200-day moving average in that session.

The 14-day relative strength index has entered the bullish zone from the neutral region and weekly RSI is heading towards the bullish zone. The daily MACD is moving higher in line with the stock price and is likely to enter positive territory. Both daily and weekly price rate of change indicators are featuring in the positive terrain implying buying interest.

We are bullish on the stock from a short-term perspective. We expect its up move to prolong and reach our price target of Rs 313 or Rs 322 in the forthcoming trading session. Traders with short-term perspective can consider buying the stock with stop-loss at Rs 294.5.