ICICIDirect has recommended Larsen & Toubro with buying range of Rs 1,730-1,757 with stop loss of Rs 1,630 at target price of 1,980.
Commenting on the investment rationale, the stock broker said, "The capital goods behemoth Larsen & Toubro remains in a firm up trend since the beginning of 2014. Recently the stock displayed outperformance in turbulent markets and bounced back from the lower band of long term rising channel as highlighted in the monthly chart.
The supportive price action near the lower band of the channel was validated by the formation of bullish Morning Star candlestick pattern on the monthly chart. A morning star candle formation during correction near an important support area highlights reversal of the current corrective price action and start of a fresh uptrend thus offers fresh entry opportunity to ride the next up move in the stock.
We expect the current up move from support levels to extend towards Rs 1,980 levels in the coming months being the price parity with previous up move from Rs 1,450 to Rs 1,893 as projected from recent trough of Rs 1,544."
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