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We recommend a buy in the stock of Dishman Pharmaceuticals and Chemicals from a short-term horizon. It is apparent from the charts of the stock that it bottomed out after marking a life-time low at Rs 32 in late December 2011. The stock changed its direction triggered by prolonged positive divergence in daily as well as weekly moving average convergence divergence and daily relative strength index.
In early January, the stock emphatically penetrated its 50-day moving average and is holding well above both 21- and 50-day moving averages. On February 9, the stock zoomed eight per cent with extraordinary volume breaking through its medium-term key resistance level around Rs 57.
The daily RSI is featuring in the bullish zone and weekly RSI is moving higher towards this zone. The daily MACD is steadily trending higher in line with the stock price implying upward momentum. The stock's medium-term uptrend line is intact. We are optimistic on the stock from a short-term horizon. We anticipate its northward journey to carry on and reach our price target of Rs 62 or Rs 64 in the sessions ahead. Traders with short-term perspective can consider buying the stock with stop-loss at Rs 58.
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