Strong trends in Airtel, target of Rs. 800

Bharti Airtel

Symbol: BHARTIARTL

Suggestion: BUY, target price Rs. 800

Fig 1: Price movement bar chart - Airtel

It is clearly visible from the price bar chart that the price has been following a trend by moving in between the trend lines (shown as blue lines in figure 1). Price has been following this particular trend from 26^th March 2009, and thus the trend has been tested a lot of times. The overall movement of the price is Bullish i.e. upwards. Further, the SMA(20) line is below the price bar chart, therefore further supporting the Bullish move. There are no signals yet appearing in the price chart which show any chances of trend reversal, thus it is expected that the price will continue following the current trend.

Fig 2: ADX chart - Airtel

Also, the ADX chart (figure 2) for Airtel is in favour of this Bullish movement. The current value of ADX is very high (43.76) and still rising, therefore making it sure that the price lie in the trending phase.

Fig 3: MACD chart - Airtel

The strength of the Bullish movement can be further confirmed by looking at the MACD chart. The MACD is well above the EMA(9) line, therefore indicating the existence of Bullish phase. However, the pace at which EMA(9) line is rising, it is possible that the Bullish phase might come to an end within a week or so.

Thus, the investor is advised to make a wise use of the current trend. This can be easily done by buying right now with a target of Rs. 800. Later on, selling the stock at the resistance price (Rs. 800) and buying at the then support price.