IDFC (Rs 65.10): Buy

We recommend a buy in Infrastructure Development Finance Company (IDFC) from a short-term trading perspective. It is clearly visible from the charts of IDFC that it has been on a long-term downtrend from its January high of Rs 235 (52-week high) forming lower lows and lower highs. However, the stock recently found support at around Rs 45, a long-term support level (July 2006 bottom) and witnessed sharp rise. We notice that the stock has formed a weekly bullish engulfing candlestick pattern, indicating short-term reversal. Subsequently, on November 3, the stock jumped up 12 per cent with an upward gap penetrating the intermediate-term down trendline (which was in place from May peak) and the 21-day moving average. The daily relative strength index is rising in the neutral region. The moving average convergence and divergence has displayed a positive divergence and signals a buy. Our short-term forecast for the stock is bullish. We anticipate IDFC to move up further until it hits our price target of Rs 74 in the upcoming trading sessions. Traders with short-term perspective can buy the stock while maintaining a stop-loss at Rs 60

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