We recommend a buy in the stock of Dishman Pharmaceuticals & Chemicals from a short-term perspective. It is evident from the charts of the stock that since bottoming out at its 52-week low of Rs 32.5 in December 2011, it has been in an intermediate-term uptrend. After a near-term corrective decline, the stock took support at Rs 60 on Wednesday and bounced up forming a bullish engulfing candlestick pattern. It gained 7.3 per cent in that session.
We observe that there is an increase in volumes over the past three trading sessions. It is hovering well above 50- and 200-day moving averages. The daily relative strength index has re-entered into the bullish zone and weekly RSI is featuring in this zone. Both daily and weekly moving average convergence divergence indicators are hovering in the positive terrain. Considering that the stock's medium-term uptrend is intact and the uptrend has resumed, we are bullish on the stock from a short-term perspective. We anticipate its rally to continue and reach our price target of Rs 68 or Rs 70 in the ensuing trading sessions.
Traders with short-term perspective can buy the stock with stop-loss at Rs 64.