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We recommend a buy in the stock of Unichem Laboratories from a short-term perspective. It is apparent from the charts of the stock that following a medium-term downtrend, the stock took support from its intermediate-term support level of Rs 170 in early March and bounced up. This move was also triggered by positive divergence shown in daily relative strength index as well as moving average convergence divergence indicator.
On Monday, the stock jumped 7.4 per cent with an upward gap and good volumes, breaching its 50-day moving average. Moreover, the stock's long-term uptrend that commenced in early 2009 low of Rs 52 is in tact and the stock appears to have resumed this trend. The daily RSI has entered into the bullish zone from the neutral region and weekly RSI is inching higher in the neutral region.
Daily rate of change indicator is featuring in the positive territory signalling buying interest. We are bullish on the stock from a short-term horizon. We anticipate its current rally to prolong until it hits our price target of Rs 201 or Rs 207 in the ensuing trading sessions. Traders with short-term perspective can consider buying the stock with stop-loss at Rs 190.
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