We recommend a buy in the stock of Fresenius Kabi Oncology from a short-term perspective. It is apparent from the charts of the stock that it bottomed out taking long-term support at Rs 80 in October 2012. Since then, the stock has been in a medium-term uptrend. Following a minor corrective decline, the stock took support at Rs 95 last week and continued to trend upwards.
On Tuesday, the stock jumped more than 8 per cent accompanied by extraordinary volumes, decisively breaching its 50- and 200-day moving averages. The daily relative strength index is on the brink of entering the bullish zone from the neutral region and the weekly RSI is moving higher in the neutral region. The daily price rate of change indicator is about to enter the positive territory and weekly indicator is featuring in the positive zone implying buying interest.
We are bullish on the stock from a short-term perspective. We anticipate its rally to prolong and reach our price target of Rs 110 or Rs 112.5 in the upcoming sessions. Traders with a short-term perspective can buy the stock with stop-loss at Rs 104 levels.
Comments:
In 'Today's Pick' recommendation, it is requested to mention a deeper stop loss also (for those who wish to take risk) apart from regular stop loss level (for risk averse). From the past analysis of the recommendations, I find that in a number of cases, even after hitting the stop loss level on a closing basis, subsequently the targets are achieved ranging from few days to few weeks thereafter. Hence, those traders willing to take risk may get benefited with deeper stop loss in place.
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