We recommend a buy in RTS Power Corporation. From the weekly chart, we note that the stock has been on a steady long-term uptrend from the March 2007 low of Rs 92. However, the stock met with a resistance at Rs 230 in September 2007. Since then, the stock has been moving sideways between Rs 200 and Rs 235. The stock is currently trading well above the 21-day and 50-day moving average line and it is testing the upper level (Rs 235) of its current trading sideways moving range.
We notice that the volumes are rising for the past two sessions. The daily and weekly momentum indicators are featuring in the bullish region. The daily moving average convergence divergence lines are steadily rising in the positive territory. The immediate support for the stock is at Rs 210 and the next support is at Rs 190 levels.
The short-term investors can buy the stock with stop at Rs 215. We are positively biased towards an upward break out of the sideways movement and expect the stock to rally up to Rs 270 level, in the short-term.
Yoganand D. Hindu Business Linne
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