Great Eastern Shipping (Rs 221.7): Buy ::Business Line

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We recommend a buy in the stock of Great Eastern Shipping Company from a short-term horizon. It is seen from the charts of the stock that ever since peaking out from its November 2010 high of Rs 393, the stock has been on an intermediate-term downtrend. However, after hitting 52-week low at Rs 200 in late November this year, the stock took support around long-term base level of Rs 200. The stock is reversing higher from the aforesaid support triggered by positive divergence displayed in daily as well as weekly moving average convergence divergence indicators.

Short-term trend is up for the stock. It managed to close above its 21-day moving average on Tuesday signalling bullishness. The 14-day relative strength index is inching higher in the neutral region towards the bullish zone and weekly RSI has re-entered into the neutral region from the bearish zone.

The daily price rate of change indicator is featuring in the positive territory indicating buying interest. Taking a contrarian view on the stock from a short-term perspective, we are optimistic on it. We anticipate the stock to rally and touch our price target of Rs 226 or Rs 235 in the upcoming sessions. Traders with short-term perspective can buy the stock with stop-loss at Rs 216.