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Investors with a short-term perspective can consider buying the stock of Orchid Chemicals & Pharmaceuticals at current levels. The stock has been on a medium-term uptrend since taking support at ₹43 in February. However, after encountering a key resistance around ₹80 in the previous week, the stock witnessed a near-term corrective decline. After a healthy retracement to the Fibonacci level of 38.2 per cent, the stock found support at ₹68.8 and bounced up.
On Tuesday, the stock jumped almost 14 per cent accompanied by extraordinary volumes conclusively breaching the key resistance at ₹80. This rally has also breached the stock’s 21-day moving average and is hovering well above the 21- and 50-day moving averages. Our short-term outlook on Orchid Chemicals is bullish. It can extend its uptrend and reach our price target of ₹87 and then ₹89 in the forthcoming trading sessions. Buy the stock while maintaining a stop-loss at ₹81.5.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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