Escorts Engineering Double Bottom

Targets :760-800 Buy range:Above 696 Stoploss :620 Duration :4-5 weeks

Outlook :
The share price of Escorts has registered a falling trendline breakout on the daily chart signalling a reversal of the corrective trend and offers a fresh entry opportunity to ride the next up move in the stock.
The stock has witnessed a strong rebound from the lows of 635 being the confluence of the following technical parameters:
The previous lows of June 2017 placed around 635.
50% retracement of the past 4-5 months up move
(514.50 to 767 ) is placed at 640
Presently, the stock has staged a breakout from a bullish reversal “Double bottom” chart pattern, with sharp surge in volumes. The above said pattern is considered to be a strong trend reversal chart pattern formed after good bearish price move where the downward price movement loses its steam (marking first bottom at 635 as of June 2017) and it retraced a bit to neck line or mid point at 695 (11th July 2017) and prices again start moving in direction of original trend and reached the first bottom level thereby forming second bottom at recent lows of 634.55.
Further, price hesitates to breakdown first bottom levels and started moving towards the neckline. However, a close above 696 levels would confirm the above said pattern.
Also, the oscillator are also showing positive signs, 14-period RSI is at 60 levels, suggesting a sharp upmove from current levels.
Going forward, we expect the stock to resume its rising trajectory from here on and may rally towards minimum pattern targets at or near 760, Hence, we suggest a Buy above 696 and also adopt a buy on dips strategy (price range 660-670), with a stop placed just below 620 on a closing basis.
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