ICICIdirect.com's report on ABB
Technical Outlook
The stock has registered a breakout above the Double bottom pattern and seen consolidating above the breakout area (Rs 1260) over the last three weeks signalling strength in the price structure and offers fresh entry opportunity to ride medium term up trend.
The stock has recently bounced back taking support at the 61.8% retracement of the previous up move from October 2014 low of Rs 985 to December 2014 high of 1398. Also, the presence of 21 weeks EMA currently placed at Rs 1182 levels indicate strength in the price structure and strong support at lower levels.
Based on the above technical evidence, we believe the stock is set to embark upon its next directional up leg towards Rs 1595 levels over the medium term. The 138.2% Fibonacci price extension of the last up move from November 2014 low of Rs 1061 to December high of Rs 1398 measured from the recent trough of Rs 1130 projects upside towards Rs 1595. Thus, it provides a good reward/risk setup to ride the ongoing uptrend.
Strategy: "Buy ABB in the range of Rs 1315.00–1332.00 for a target price of Rs 1590.00 with a stop loss below Rs 1210.00 on a closing basis", says ICICIdirect.com research report.
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