Today's Pick

Lupin (₹889.9): Buy

Yoganand D BL Research Bureau | Updated on July 30, 2020 Published on July 31, 2020

The stock of Lupin gained 3.5 per cent on Thursday, extending the upmove, it decisively breached the 21-day moving average. This rally provides investors with a short-term perspective an opportunity to buy the stock at the current levels.

Since it took support at around ₹550 in late March, the stock had been in a medium-term uptrend. But, it encountered a key resistance at ₹950 in mid-June and was on a corrective decline until recently. The stock took support at ₹850 and bounced up strongly, triggered by positive divergence on the daily price rate of change indicator. This indicator has also entered the positive terrain, implying buying interest.

The key support at ₹850 has cushioned the stock well. Further, the stock has emphatically closed above the 21-day, and tests the 50-day moving average with a positive bias. The daily relative strength index (RSI) is on the brink of entering the bullish zone from the neutral region and the weekly RSI is hovering in the neutral region.

There has been an increase in the daily volume over the past two trading sessions. The stock has the potential to trend northwards and reach the price targets of ₹927 and ₹945 in the ensuing trading sessions. Traders with a short-term perspective can buy the stock with a stop-loss at ₹872 levels.

Note: The recommendations are based on technical analysis. There is a risk of loss in trading.

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Published on July 31, 2020
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