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We recommend a buy in National Aluminium Company (Nalco) from a short-term perspective. From the charts of Nalco it is evident that the stock has been on a long-term uptrend from its August 2007 low of Rs 237. However, in the medium-term the stock had been on a downtrend between early January to mid February (from its life high of Rs 546 to low of Rs 325). More recently the stock found support at the long-term support level at around Rs 325 (April 2006 peak) and bounced off resuming the uptrend. Following this, on February 18, the stock penetrated the medium-term down trendline. We note that there is an increase in volume for the past three trading sessions. The daily momentum indicator has entered the neutral region from the bearish zone. In addition, the long-term uptrend is still in place. We are bullish on the stock in the short-term. We expect the stock’s up move to persist further to our target price of Rs 430 in the short-term. Investors with a short-term perspective can buy the stock with stop-loss at Rs 355 levels.

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