ICICIdirect recommends buying MOIL in the range of Rs 337-327 for target of Rs 430 with stop loss of Rs 290 on a closing basis.

Commenting on the rationale, the stock broker said, "The stock has ventured out of a major rounding base formation comprising the entire price movement since August 2011 till first half of May 2014, thereby signalling a change of guard from long term trend perspective.

A rounding bottom formation panning out over a longer time horizon is indicative of the stock price absorbing all the negatives in its stride and a breakout past the neckline triggers a reversal in trend from bearish to bullish and augurs well for the key reversal pattern signalling a medium-term trend reversal. The stock steered past the neckline of rounding pattern above Rs 310 during previous weeks trade thereby signalling a change of guard from medium term trend perspective.

Volume behaviour during the pattern formation and during the subsequent breakout highlights the bullish underpinnings. The price breakout was accompanied with a strong surge in volumes as the stock witnessed more then four times its 13 week average volume (5 lakh shares per week) indicating strong participation in the direction of the trend.

We expect the stock to head towards the target of Rs 438 being the measuring implication of the price pattern i.e. the distance between the neckline Rs 310 and the base of the rounding pattern Rs182 (310-182=128) added to the breakout point (310+128=438) projects an upside target of Rs438 levels from a medium term perspective.

Among the oscillators the weekly MACD (E-12/26/9) remains in rising mode above its trigger line and is seen diverging from its 9 period average which highlights the underlying strength and indicates continuation of positive momentum in the medium term."

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