NTPC Buy Target : 173
Ø NTPC has been making lower lows and lower highs since Sept 2010. However, technical oscillator such as RSI has been rising, signalling what technical analyst call as "Divergence", which is nothing but a discrepancy between what the price is telling and what momentum is telling.
Ø Divergences tend to be more robust when they form after an overbought or oversold reading. Also, when these divergences occur along with a price breakout then chances are that a reversal in the stock will begin.
NTPC has seen a price breakout, accompanied with volumes, and chances are that the stock could head towards 173 levels.
Please see chart attached.
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