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We recommend a buy in ABB from a short-term perspective. It is evident in the charts of ABB that the stock has been on a long-term uptrend from March 2007 low of Rs 638. However, after marking an all-time high of Rs 1,670 in November 2007, the stock is currently in a medium term down-trend. This medium-term downtrend has retraced 50 per cent (Fibonacci retracement) level of it prior long-term uptrend. The stock is currently reversing from the key support level around Rs 1,100 level, supported by bullish divergence in the daily momentum indicator. On February 4, the stock gained 7 per cent and has crossed above the 200-day moving line. We are bullish on the stock in the short-term and expect its current up move to persist to our target level of Rs 1,400. Short-term investors can buy the stock with stop at Rs 1,100 levels.

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