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On Wednesday, the stock of Elecon Engineering Company surged 12.7 per cent accompanied with extraordinary volume, breaking above the 200-DMA and a key resistance at ₹60. This rally gives an opportunity for the investor with a short-term perspective to buy the stock at current levels.
Significant long-term support in the band between ₹45 and ₹46 arrested the stock’s decline in November 2016 and again in August 2017. Since taking support in this base zone this August, the stock has been in a medium-term uptrend. While trending up, the stock emphatically breached its key hurdles at ₹51 and ₹60 levels. There has been an increase in daily volume over the past three weeks.
Both the daily and weekly relative strength indices have entered the bullish zone from the neutral region. Moreover, the daily as well as weekly price rate of change indicators features in the positive territory implying buying interest. The decisive break above ₹60 on Wednesday has strengthened the medium-term uptrend. Short-term outlook is bullish for the stock. Targets are ₹65.5 and ₹67. Traders can buy with a stop-loss at ₹61.5.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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