We recommend a buy in the stock of Jubilant Life Sciences from a
We recommend a buy in the stock of Jubilant Life Sciences from a short-term horizon. It is evident from the charts of the stock that after encountering key resistance at around Rs 240 in December 2012, the stock started to decline. Since then, the stock has been on an intermediate-term downtrend. Medium-term trend is also down. However, the stock registered a multi-year low at Rs 65 on August 28 and changed direction triggered by positive divergence in daily relative strength as well as moving average convergence divergence. This level is also a significant long-term support level. It has been on a near-term up-move since then.
On Wednesday, the stock jumped 8 per cent accompanied by good volume, breaching its 21-day moving average and immediate resistance at Rs 82. Further, the daily price rate of change indicator is featuring in the positive area implying buying interest. Taking a contrarian stance on the stock, we are bullish on it from a short-term horizon. We expect its rally to continue and reach our price target of Rs 89 or Rs 91 in the ensuing trading sessions. Traders with short-term perspective can buy the stock with stop-loss at Rs 83.3 level.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)