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Conclusively breaching its 50-day moving average and key support at ₹590 levels, the stock of Ranbaxy Laboratories tumbled 3.4 per cent on Tuesday. This fall has strengthened the stock’s short-term downtrend, giving traders an opportunity to sell the stock. The intermediate-term uptrend that started from the January low of ₹306 has come to a halt after encountering a significant long-term resistance around ₹650 in late August and early September. Since then, the stock has been on a short-term downtrend.
The indicators on the daily charts have entered the bearish zone backing the downtrend. Indicators on the weekly chart too have started moving downwards implying bearish momentum. Volumes are decreasing in line with the downtrend. Our short-term outlook is bearish for Ranbaxy. Sell the stock with a stop-loss at ₹586 levels. Short-term targets are ₹550 and ₹540.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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