The short-term outlook for the stock of Elgi Equipments is bullish. The strong 5.2 per cent surge on Tuesday indicates that a fresh leg of rally has begun. Immediate support is at ₹511. Below ₹504 is the next important support that can limit the downside. The stock of Elgi Equipments can rally to ₹585-₹595 over the next three-four weeks.
Traders can go long at current levels. Accumulate on dips at ₹512. Buy more at ₹507 if the price dips below ₹511. So, the average entry level will be at ₹512. Keep the stop-loss at ₹495. Trail the stop-loss up to ₹525 as soon as the stock moves up to ₹535. Move the stop-loss further up to ₹545 when the stock touches ₹555 on the upside. Exit the stock at ₹570.
(Note: The recommendations are based on technical analysis. There is risk of loss in trading.)