India Infoline recommends JP Hydro; target Rs33

India Infoline recommends JP Hydro; target Rs33

The share price of JP Hydro has witnessed steep decline from a high of Rs62 in August 2008 to a low of Rs22 in October 2008. This represents almost 65% correction in value terms in about three month’s period.

The stock attempted a pull back to the Rs32-33 levels during November 2008. However, the rally didn’t sustain and led to a fall in stocks prices towards the end of November 2008.

The share price appears to have formed multiple bottoms in the range of Rs24-26 levels (Rs25 being held on a closing basis).

The daily momentum indicators i.e. RSI and MACD are exhibiting strong positive divergence, indicating strong supports placed around the Rs24-26 levels.

The stock is currently trading above the cluster of daily averages placed in the range of Rs28-29 levels. A move above the 13-week average currently placed at Rs32 levels will infuse momentum in the stock and see the share price head to the Rs37-40 levels in the coming weeks.

Keeping in mind the above mentioned technical evidences, traders can BUY the stock at current levels with stop loss placed at Rs27 levels for a target of Rs33 and Rs35 levels. A stop loss of Rs24 is recommended on all investment positions.