Elecon Engineering Company

Investors with medium-term perspective can consider investing in the stock of Elecon Engineering Company (Rs 81.5).

The stock was on an intermediate-term uptrend from March 2009 low around Rs 25 till it encountered resistance at Rs 110 in October. Its decline from that peak was arrested in the significant support band between Rs 70 and Rs 73 in mid March.

Positive divergence displayed in the daily moving average convergence and divergence indicator triggered the stock's up move from the aforementioned band. For the past three weeks the stock has been on a nascent short-term uptrend. While trending higher, it breached its 21- and 50-day moving averages last week.

Moreover, the stock made a weekly gain of 9 per cent accompanied with high volume. With this gain the stock has breached its downtrend line in the weekly chart. The daily relative strength index is featuring in the bullish zone and weekly RSI heading towards this zone in the neutral region. After signalling a buy, the daily moving average convergence and divergence indicator is on the brink of entering into the positive territory, implying a positive outlook for this stock.

We are bullish on Elecon Engineering from a medium-term perspective. We believe that it has the potential to rally towards the price target of Rs 98 in the coming weeks. Investors with medium-term perspective can consider buying the stock with stop-loss at Rs 73. Short-term traders can buy with target of Rs 89 and the stop-loss is Rs 77.5

Follow up - Network 18 Media and Investments (Rs 139.3)

The stock gained 12.7 per cent last week and has achieved our short-term target. It is currently in the process of heading towards our medium-term target of Rs 150. We reiterate our medium-term bullish outlook on the stock. Investors with medium-term perspective can consider holding the stock while maintaining a revised stop-loss at Rs 120 level.

via BL