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The stock of Escorts gained 3.9 per cent accompanied by above average volume on Monday and closed above the 21-day moving average. This rally provides investors with a short-term horizon an opportunity to buy the stock at current levels.
Since registering a 52-week low at ₹423 in late August this year, the stock has been in a medium-term uptrend. With the key support at around ₹630 cushioning the stock, it moved above this level over the past one-and-a-half month. The level of ₹630 will continue to act as a significant base. The stock hovers well above its 50- and 200-day moving averages.
The daily relative strength index features in the neutral region and the weekly RSI is on the brink of entering the bullish zone from the neutral region. Moreover, the daily as well as the weekly price rate of change indicators are hovering in the positive terrain indicating buying interest.
The stock appears to have resumed the medium-term uptrend and can continue to trend upwards in the coming trading sessions. Targets are ₹685 and ₹700. Traders can buy with a stop-loss placed at ₹645.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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