We recommend a buy in Punj Lloyd from a short-term perspective. It is evident form the charts of Punj Lloyd that it had been on a medium-term downtrend from its January 2008 high of Rs 589 to its March low of Rs 286. The stock's medium-term downtrend got arrested recently at Rs 300.
Gradually, the stock breached the medium-term down trendline and began to move up. On April 11, the stock jumped 4 per cent penetrating the 21-day moving average, accompanied with good volumes. The daily momentum indicator is rising towards the bullish zone in the neutral region. The weekly momentum indicator appears to have found support at 40 levels and has begun to move upwards. We are bullish on the stock from a short-term point of view. We expect the stock to move up to our price target of Rs 380 in the short-term.
Investor with short-term perspective can buy the stock while keeping the stop-loss at Rs 310.