Top buzzing stock: Gujarat Gas Limited

The stock of GUJGASLTD has surged over 7% and is one of the top gainers in the Nifty 500 universe.

 Gujarat Gas Limited is in focus today due to its strong price action and surged over 7% in early trade. After a strong gap-up opening, the stock experienced some selling pressure but recovered soon thereafter.

On the technical chart, the stock has surged above its short term resistance level of Rs 540 and has hit the day’s high at Rs 554. It has formed a strong bullish candle with a wick at the bottom, justifying strong buying interest at lower levels. Moreover, huge volumes have been recorded today, which is found to be greater than the 10-day, 30-day, and 50-day average volume. Thus, the price structure looks bullish.

The 14-period daily RSI (57.06) has crossed above its prior swing high and indicates strong strength in the stock. The On Balance Volume (OBV) has hit a higher high and indicates extreme bullishness from the volume’s point of view. On the weekly timeframe, the MACD line and the signal line are converging and might indicate a bullish crossover in the coming period. The Elder Impulse system indicates a fresh buy while KST and TSI indicators show improved strength in the stock. Moreover, it has surged above its 20-DMA and 50-DMA.

The stock has performed poorly on a YTD basis and has underperformed the broader index. However, it shows bullishness for the near term and can trade higher in the coming days, It has the potential to test the level of Rs 600, followed by Rs 620 in short to medium term. It presents a good opportunity for swing trading. Short term traders/positional traders can expect good gains from this stock in the near term as per the technical analysis.

Gujarat Gas is primarily engaged in the natural gas business. It has a market capitalization of about Rs 15000 crore and is one of the strong companies in its sector.