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CESC (Rs 489.55): Buy

The Hindu Business Line recommends a buy in CESC from a short-term perspective. The charts of CESC show that it has been on a medium-term up trend form its March 2008 low of Rs 360 level. The stock conclusively penetrated the medium-term down trendline (that commenced from the January high of Rs 715) in mid-April and progressed upwards. This up-move has also taken the stock above its50-day moving average.
The daily momentum indicator has re-entered the bullish zone form the neutral region and the daily moving average convergence and divergence is featuring in the positive territory. The fact that the stock is sustaining above the medium-term up trendline, is also a positive for the stock.
We expect it to rally to our price target level of Rs 552 in the forthcoming trading sessions. Investor with short-term perspective can buy CESC while keeping the stop-loss at Rs 460.
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