Buy Gujarat Gas only above Rs 660; tgt Rs 780: Way2Wealth

Way2Wealth's report on Gujarat Gas Company

"During the month of December 2014, we observed overbearing rally in GUJARATGAS wherein the prices propelled from the level of 526 to make life time high of 811. The overall returns were more than 50% in a single month. Thereafter, the stock underwent some massive profit booking and the prices started inching lower very month to retest the 560 mark. Now the given daily chart depicts that the stock found support near 560 mark since it was a 78.6% FIB retracement level of the entire rally from 526 – 811. For a couple of instances the stock rebounded from 560 level and surpassed the 650 mark confirming the ‘Double Bottom’ formation."

"In addition, the 89 - Day EMA placed near 610 is consistently acting as a demand zone for the stock. Going further a convincing move above 660 barricade will activate a breakout from the multiple resistance zone. Also, the price pattern resembles a bullish ‘Inverse Head and Shoulder’ pattern in the making. The placement of averages and the momentum oscillators indicates that impact of ‘Double Bottom’ and ‘H &S’ pattern could result in a strong spontaneous move in the counter. Therefore, due to the mentioned technical evidences we are expecting a powerfully built rally in the impending weeks. We advise traders to go long in the stock ONLY above 660 for an upside target of 780 in medium term", says Way2Wealth research report.

Investment Strategy:Buy ONLY above 660 with a stop loss of 609 for a Target of 780.Risk/return ratio: 1:2.4

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