We recommend a buy in the stock of Biocon from a short-term perspective. It is evident from the charts of the stock that it found support at around Rs 210 in May-June this year and reversed its direction upwards. Since then, the stock has been on a medium-term uptrend. Following a minor sideways consolidation the stock made an upward breakthrough of resistance at Rs 253 by jumping 4.5 per cent, with good volumes last Friday. The stock has also breached its 200-day moving average. The daily relative strength index has entered the bullish zone from the neutral region and weekly RSI is moving higher in the neutral region towards the bullish zone. The daily moving average convergence divergence indicator has signalled a buy and started to move higher in line with the stock. Medium-term up-trend line is in tact for the stock. We are bullish on it from a short-term perspective. We expect its up move to prolong and reach our price target of Rs 267.5 or Rs 275.5 in the approaching trading sessions. Traders with a short-term perspective can consider buying the stock with stop-loss at Rs 252.
Biocon (Rs 259.4): Buy
September 2, 2012: