Stock picks of the day for January 07, 2019

Escorts Ltd: Buy| LTP: Rs 724| Target: Rs 759 | Stop loss: Rs 680 | Upside: 5 percent

Escorts maintained an upward trajectory for over the past one month after making a healthy consolidation from a higher price-band of Rs 722-720 towards a low of Rs 585.

It took strong support in 560-550 zone to reserve the trend into bullish trajectory where it managed to break out from its 100-days moving average level placed at Rs 711.

The scrip also witnessed a decent volume growth during the same period and formed a small bullish candlestick pattern on both weekly and daily price charts.

The momentum indicator outlined a positive divergence in price with its RSI at 63, coupled with MACD managing to make a bullish crossover in past to trade above its signal line. We recommend a buy.

Hindalco Industries Ltd: Sell| LTP: Rs 210| Target: Rs 201 | Stop loss: Rs 228| Downside: 4 percent

Hindalco is trading in a negative trajectory during the entire week and slipped below its crucial level of 200-days moving average placed at Rs 228, and thus witnessed a sustained sell-off throughout the week.

Although it made a decent rally after forming low of Rs 192 toward a high of Rs 259 on its six-month price chart, it failed to continue with momentum to trade in sideways direction mostly favouring bearish regime.

Despite its attempt to reverse the trend in the previous week, the scrip witnessed a sell-off in last four sessions which signalled a bearish sentiment. It formed a long bearish candlestick pattern on the weekly price chart coupled with small bearish on its daily chart.

Further, the weekly RSI stood at 41 indicating negative divergence, and MACD continued to trade below its signal line. We have a sell recommendation for Hindalco.

Jindal Steel & Power Ltd: Sell| LTP: Rs 152| Target: Rs 142| Stop loss: Rs 155 | Downside: 6 percent

Jindal Steel & Power remained in a consolidation phase in last six-month falling from a higher level of Rs 240 towards a low of Rs 160.

Although it marginally rebounded towards Rs 190 level it failed to sustain the momentum to further form a low at Rs 140, and subsequently, it fell below its 200-days moving an average of Rs 189 on a closing basis.

The scrip currently trades below all moving averages that indicate ongoing selling pressure. The scrip formed a solid bearish candlestick pattern on the weekly chart coupled with long bearish candlestick pattern on the daily price chart.

The momentum indicator continued to outline weak trend with its weekly RSI at 36 that signals downward divergence in price coupled with MACD trading below its signal line on the weekly chart. We have a sell recommendation for Jindal Steel.