Essar Oil Ltd. CMP— Rs 131.30 We recommend going long in this counter at current levels.
Technical Outlook:-
The most important observation to be made on the weekly charts of Essar Oil Ltd. is that the share price action of the stock since 19th Nov, 2010 has taken the shape of an inverted Head and shoulders pattern. We would like to point out that this price pattern is one of the most acclaimed bullish reversal price patterns and has positive implications on the share movements of a stock.
Yesterday’s close has also taken the stock above its key long term moving average. The RSI indicator of the stock has also given a buy signal.
Suggested Trading Strategy:-
We recommend traders to buy between Rs 130—Rs 131.50 levels with a stop loss placed below Rs 126.40 levels for targets of Rs 135 – Rs 138 levels, expected to be achieved over the coming 3-4 sessions.
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