Buy stocks of eClerx Services; target of Rs 910

eClerx:-

“eClerx is a leading provider of data analytics, data audits and related services to global enterprise clients across industries. After its listing at the beginning of financial crisis in January 2008, the stock price has seen extreme movements. First it slumped towards its all time lows around Rs48 and then embarked upon a spectacular multi-fold rally during 2009 to July 2011 to hit its life-time high of Rs875. Post the July 2011 high, the stock embarked upon a year long correction to hit lows of Rs570 by June 2012. This price decline has occurred in a well defined mildly declining channel formation as highlighted in the adjoining weekly candlestick chart. Recently, the stock price posted a bullish upward break out from this falling channel around Rs740 accompanied by rising volumes.”

“From a technical perspective, this is a bullish signal for future price movements. According to the classic theory, price implication of a channel breakout is measured by adding the price range of the consolidation to the breakout level. In this case, the range of the channel (774-600 = 174 points) added to Rs740 projects the price target of Rs914. We expect the stock price to scale to its projected price target with some temporary hurdle in the vicinity of its life-time high of Rs875 levels. During the recent climb, the stock price has marched above its all medium and long term moving averages and is forming rising peaks and troughs indicating a bullish trend. Among momentum oscillators, the 14 week Relative Strength Index (RSI) has climbed upon its bullish territory indicating strength from a medium-term perspective.”

"Accumulate eClerx in a staggered manner in the range of Rs 770-787 for a target of Rs 910 with a stop loss below Rs 714 on a closing basis,” Says ICICIdirect.com research report.