Buy Rural Electrification Corporation for target of Rs 410:Aditya Birla Money

MUMBAI: Aditya Birla Money is of the view that stochastic oscillator in Rural Electrification Corporation has formed a positive crossover very close to the oversold territory. The stock is likely to touch Rs 410 in coming sessions, the brokerage says.

“Rural Electrification Corporation right from the bottom of 207 as on Feb’10 has been holding and trading within it a well defined Uptrending channel.

Within the given channel it has finding good support from the confluence of channel inside band and 21 Daily Exponential Moving Average (DEMA) support.

Every time it has tested the inside band and DEMA support it has bounced back sharply and has given strong healthy positive return.

This time too it has found good support at the mentioned support zone indicated by the formation of Doji Candlestick formation.

The Doji pattern signifies a weakening in bearish sentiment at important support zone and bulls coming with vengeance to protect important level and recapture the lost ground.

RSI has produced a DD+ formation which suggests that a slow and gradual fall in price has led to sharp and disproportionate fall in RSI. The DD+ formation has occurred right at RSI channel support which further augments its validity. The stochastic oscillator has formed a positive crossover very close to the oversold territory.

We recommend buying REC above Rs 374 with a closing stoploss of Rs 360 for target of Rs 410 levels,” the report said.