Today’s pick is SUZLON [stockquote]SUZLON[/stockquote]. The stock started the year with a steep uptrend to blow past Rs. 30. It hovered around that point for a month, and finally gave up the momentum and slid all the way down to Rs. 15. However, it looks like it is at the beginning of an uptrend, having broken the pennant it was stuck in since December. In the last three months, the stock has moved +28% vs. +5% of the Nifty’s.
Oscillators RSI and CMO are in no man’s land and are not signaling any directional move. Short-term technical just saw a 4×9 and 4X18 bullish cross-over.
The MACD line is moving close to the signal line but the increasing histogram levels are suggesting a bullish outlook. The long-term GMMA lines are starting to flag out suggesting an upcoming long term bullish move for the scrip.
SUZLON’s average correlation with the Nifty is 0.57, which is positive. The scrip will be replicating the movement of Nifty. [stockquote]NIFTYBEES[/stockquote]
SUZLON has a historical volatility in the range of 0.4 to 1.0. The scrip’s volatility currently is in the middle of the range.
Given these technicals, we suggest a short-term and a long-term Buy for the script. Also, looking at the volatile history of the stock, we suggest traders to use trailing stop-losses in order to book profits if a trend-reversal were to take place.
