We recommend a buy in the stock of Sun Pharma Advanced Research Company from a short-term perspective. It is evident from the charts of the stock that it has been consolidating sideways in a broad range between Rs 66 and Rs 100 from last November.

Following a decline from the upper boundary from early July, the stock found support in mid-August at Rs 66 which is a significant long-term support and also lower boundary of the range. Since then the stock has been on a budding short-term up move.

Strengthening the up move, the stock surged seven per cent with good volumes breaching its immediate resistance at around Rs 76 on Monday. The 14-day relative strength index is likely to enter into the bullish zone from the neutral region, and weekly RSI is inching higher in the neutral region.

Daily price rate of change indicator has re-entered into the positive territory implying buying interest has returned. Daily moving average convergence divergence indicator is moving higher in line with the stock price.

We are bullish on the stock from a short-term horizon. We expect its up move to prolong until it hits our price target of Rs 82 or Rs 84.5 in the days ahead. Traders with short-term perspective can buy the stock while maintaining stop-loss at Rs 77.5 levels.

Related Topics