Top buzzing stock: Indraprastha Gas Ltd

On Tuesday, the stock has witnessed tremendous buying interest at lower levels and has jumped about 10%.

Indraprastha Gas Ltd is engaged (IGL) in the distribution of Compressed Natural Gas (CNG) and Piped Natural Gas (PNG) in Delhi to consumers in the domestic, transport, and commercial sectors. They are further exploring new gas supply sources under this segment. With a market capitalization of Rs 26000 crore, it is one of the strong midcap company in its sector.

The stock of IGL has been quite bearish in the medium term. Since its high of Rs 602.05 in September, the stock has been in a strong downtrend and has lost about 45% of its value in just 6 months. It is extremely oversold and is trading at strong support levels. On Tuesday, the stock has witnessed tremendous buying interest at lower levels and has jumped about 10%. With such strong price action, it is trading above its 20-DMA after many days. The stock has recorded a huge volume of 11 million in the first two hours of the trade.

The technical parameters show improved strength in the stock. The 14-period daily RSI, which was in the bearish territory, has jumped above 50. The daily MACD has given a bullish crossover and Elder Impulse System, too, indicates a fresh buy. The On Balance Volume (OBV) has indicated strong strength from a volumes point of view. The other momentum oscillators and indicators also point towards the possibility of a trend reversal. Overall, the situation has largely improved and the stock is heading for a potential reversal from here on.

Considering strong price action and bullish technical indicators, coupled with huge volume, the stock is a perfect candidate for swing trading. It has the potential to test the level of Rs 400, followed by the level of Rs 420, which is its strong resistance. Moreover, positional traders can expect decent gains in the short to medium term.

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