We recommend a buy in JB Chemicals & Pharmaceuticals at current market price. It is evident from the weekly chart of JB Chemicals that it has been on a long-term downtrend since its life high of Rs 139, recorded in early 2006.
However, the stock found support at Rs 62 levels in August 2007 and has been consolidating sideways in the range of Rs 60 and Rs 70 since then. JB Chemicals has made a sharp move on December 5, recording a gain of 6 per cent accompanied by heavy volumes. The stock has recently penetrated the 21- and 50-day moving average lines too.
The weekly momentum indicator has recovered from the bearish zone. The daily momentum indicator has entered the bullish region. The immediate support for the stock is at Rs 62 and the subsequent support is at Rs 50. We expect the stock to rally to Rs 85 level in the short-term. Short-term investors can buy the stock at current market price while keeping their stop loss at Rs 65.
Via Businessline
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