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The stock of Alembic Pharmaceuticals Limited, that registered its lifetime high of ₹1,128.9 in early August following an astronomical rally that began in the final week of March this year, has been wobbly during the past couple of weeks. The short-term trend seems to have turned negative, opening the door for more correction.
On Monday, the stock decisively closed below the psychological level of ₹1,000 where it also confirmed the bear-flag pattern, meaning there is more to the downside. Notably, the price has slipped below the 50-day moving average for the first time since March and marked a lower low, adding to the downward bias.
Moreover, the daily relative strength indicator has gone below the midpoint level of 50 and the moving average convergence divergence indicator is tracing a downward trajectory and has entered the bearish zone. This makes the case stronger for the bears. The above factors hint at further depreciation in stock price and so, traders looking for near-term opportunities can sell the stock with stop-loss at ₹975. The potential target can be ₹864.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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