Reliance NCD 2016

Engineers India Ltd - BUY

 Engineers India Ltd - BUY 

CMP: Rs 292, 6-9mnths Target: Rs 355, Upside: 21.5%

“Flag pattern breakout” Engineers India (Engineers) has been stuck in a narrow trading range for the past three months. This consolidation phase saw the stock gyrating in a 40 point trading range. After taking a pause from September to November, Engineers has finally seen a price outburst on the weekly charts indicating a "Flag Pattern" breakout. This suggests Engineers is all set to resume its northbound journey. If the breakout plays out the way it should then projections are indicating that the stock has a potential first target of Rs 330, which also coincides with its immediate previous peak, translating into 15.7% returns. 

“Symmetrical triangle breakout” On analysing the larger time frame monthly chart, Engineers has already broken out from a Symmetrical triangle pattern which further accentuates our positive stance on the stock. The up thrust has been accompanied with credible volumes indicating strength in the current upswing. Conservative projection of the pattern suggests that Engineers is set to rally up to Rs 355 in 6-9 months. 

Based on the above evidence, the projection of the structure indicates first potential target of Rs 330 and second target of Rs 355, translating into 21.5% upside. The breakout would stand void if Engineers India breaks below the midpoint of the Flag pattern placed at Rs 260 on closing basis.