The Hindu Business Line : Ranbaxy Laboratories (Rs 435.65): Sell

We recommend a sell in Ranbaxy Laboratories from a short-term perspective. From the charts of the Ranbaxy Laboratories we see that the stock was on a medium-term uptrend from its January 2008 low of Rs 299 to a high of Rs 473 touched in mid March. After encountering resistance at around Rs 470 levels, the stock reversed direction recently, supported by the negative divergence in the daily momentum indicator. Subsequently, the stock began to decline and has breached the med ium-term up trendline and the 21-day moving average. We also notice that the volume has been declining since early March. The daily momentum indicator is falling in the neutral region and the weekly momentum indicator has entered the neutral region for the bullish zone. The moving average convergence divergence has crossed over, indicating a sell. Our short-term outlook for the stock is bearish. We expect the stock to decline to our target level of Rs 375 in the short term. Investors with a short-term perspective can sell the stock with stop loss at Rs 465.

Yoganand D.

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