Technical Analysis

Elecon Engineering Company (₹66): Buy

Yoganand D BL Research Bureau | Updated on March 21, 2019 Published on March 22, 2019

Investors with a short-term horizon can buy the stock of Elecon Engineering Company at current levels. On Wednesday, the stock jumped 5 per cent accompanied with an above average volume, reinforcing the short-term uptrend. Since taking support at around ₹50 in October 2018, the stock has been in a medium-term uptrend. The short-term trend is also up.

In early March, the stock conclusively breached a key resistance at ₹62 as well as its 50- and 200-day moving averages. After a minor corrective decline, the stock found support at ₹62 recently and reversed higher. It currently trades well above the 50- and 200-day moving averages.

The daily relative strength index has just entered the bullish zone from the neutral region backing the upmove. The weekly RSI features in the neutral region. The short-term outlook is bullish for the stock. It has potential to extend the rally and reach the price targets of ₹69 and ₹70 in the ensuing trading sessions. Traders with a short-term view can buy the stock with a stop-loss at ₹64.5.

(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)

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