Technical Analysis

Ajanta Pharma (₹957.3): Buy

Yoganand D | Updated on August 02, 2019

The stock of Ajanta Pharma was on highlight on Thursday and gained 8.6 per cent accompanied by extraordinary volume. This rally gives investors with a short-term perspective an opportunity to buy the stock at current levels.

Since encountering a key resistance at ₹1,200 in January, the stock has been in a medium-term downtrend. Short-term trend has been down from the May high of ₹1,091. But, the stock found support recently after registering a 52-week low at ₹840 on Wednesday. The stock subsequently changed direction triggered by positive divergence in the daily relative strength index and moving average convergence divergence indicator.

The daily RSI is on the brink of entering the bullish zone from the neutral region and the weekly RSI has entered the neutral region from the bearish zone. Also, the daily price rate of change indicator has entered the positive terrain implying buying interest.

The short-term outlook is bullish for the stock. It can continue to trend upwards and reach the price targets of ₹995 and ₹1,015 in the upcoming trading sessions. Traders can buy with a stop-loss at ₹935.

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

Published on August 02, 2019

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