We recommend a buy in the stock of Escorts from a short-term perspective. It is evident from the charts of the stock that it changed direction after recording a 52-week low at Rs 48.3 in late March. Since then the stock has been on a medium-term uptrend forming higher peaks and troughs. Short-term trend is also up for the stock. In late May this year, the stock decisively breached its 200-day moving average and is hovering well above its 50- and 200-day moving averages.

On Monday, the stock surged 4.7 per cent accompanied by above average volume, breaching a key resistance at around Rs 75. The rally has reinforced its uptrend. Both daily and weekly relative strength indices have entered the bullish zone from the neutral region. The daily as well as weekly price rate of change indicators are featuring in the positive area implying buying interest. Likewise, daily and weekly moving average convergence divergence indicators are hovering in the positive territory indicating upward momentum. We are bullish on the stock from a short-term perspective. We anticipate its rally to continue and reach our price target of Rs 81.5 or Rs 83 in the approaching trading sessions. Traders with short-term perspective can consider buying the stock with stop-loss at Rs 76.3 level.

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

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