Today's Pick - Aban Offshore

We recommend a buy in Aban Offshore from a short-term perspective. It is clearly visible from the charts of Aban Offshore that its intermediate-term downtrend which began in late May from Rs 4,292 appears to have halted at around Rs 2,015 during late August. However, the stock reversed direction, after finding support at Rs 2,015 in late August. This stock's reversal had been supported by a prolonged positive divergence in the daily moving average convergence and divergence, which is heading towards the positive territory. On September 4, the stock penetrated its intermediate-term down trendline by surging 5 per cent with good volume. Subsequently, the stock crossed over its 21-day moving average gaining bullish momentum and is trading above this average. We notice a hammer candlestick formation on September 15, which is a bullish pattern supporting our view. The daily relative strength index (RSI) is rising towards the bullish zone and the weekly RSI is likely to enter the neutral region. Our short-term forecast for the stock is bullish. We expect the stock to trend upward until it hits our price target of Rs 2,550 in the forthcoming trading sessions. Traders with short-term perspective can buy the stock while maintaining a stop-loss at Rs 2,195.

via BL