The short-term outlook for the stock of Elecon Engineering is bullish. The corrective fall from the November high of ₹219 found support at ₹164 in the second half of December.
The stock has been moving up since the last week of December indicating that the corrective fall has ended. Supports are at ₹193 and ₹183. Dips to these supports are likely to find fresh buyers coming into the market. The stock can rise to ₹240 in the coming weeks.
Traders with a short-term perspective can go long at current levels. Accumulate longs on dips at ₹196. Stop-loss can be kept at ₹181. Trail the stop-loss up to ₹210 as soon as the stock moves up to ₹219. Move the stop-loss further up to ₹224 as soon as the stock touches ₹232. Book profits at ₹238. The region around ₹240 is a strong resistance that can halt the current up move and trigger a pull-back. As mentioned, traders will have to unwind their long positions near this resistance level.
The bullish outlook will get negated if the stock declines below ₹183 decisively. Such a break can drag the stock down to ₹165-₹160 and even ₹140. But such a fall looks less likely.
(Note: The recommendations are based on technical analysis. There is risk of loss in trading.)