Gujarat Gas Company

We recommend a buy in Gujarat Gas Company at current market price. Form the weekly chart of Gujarat Gas; we note that it has been on steady long-term uptrend form July 2006 low of Rs 184 levels. From the daily chart it is clear that the stock has been on an intermediate term uptrend from August 2007 trough of Rs 267. However, the stock met with a resistance at Rs 370 in late November 2007. Following a minor correction, the stock is once again testing this resistance level. The stock is trading well above the 21-day and 50-day moving average lines. The weekly momentum indicator is featuring in the bullish region. The daily moving average convergence divergence lines are progressively rising in the positive territory. On the downside, the immediate support for the stock is at Rs 330 and the next support is at Rs 300 levels. Considering the fact that the intermediate term uptrend is currently intact, we expect the stock to resume its long-term uptrend and rally up to Rs 400 level in the short-term. The short-term investors can buy the stock while keeping the stop-loss at Rs 330 level.

Via BL