Technical Analysis

Glenmark Pharma: Bet on a bounce back

KS BADRI NARAYANAN | Updated on January 10, 2018


Glenmark Pharmaceuticals (₹612): The long and medium-term outlook for the pharma major is negative. A crucial support is at ₹584 and a close below that will trigger a fresh selling. Immediate resistance is at ₹632 and a close above will change the short-term outlook to positive. Next resistance is at ₹685 and only a close above ₹720 will change the medium-term outlook to positive.

F&O pointers: The counter fresh longs on Friday, as over 5.76 lakh shares were added (10 per cent) in open interests. The Glenmark futures closed with a premium of about ₹2 signalling creation of fresh longs. Options are not very active.

Strategy: Traders can go long on Glenmark Pharmaceuticals futures. Keep the stop-loss at ₹593 initially, it can be shifted to ₹604 if the stock opens and stays positively on Monday. Traders could consider an initial target of ₹632.

Traders with a high-risk appetite can hold Glenmark for a higher target of ₹720. Traders should bear it in mind that the stock is highly volatile in nature and could fade away the profit or widen the loss within quick span of time on any adverse news.

Alternatively, traders could consider buying ₹620-call, which closed at ₹18.50. The total loss could be the premium paid which works out to ₹12,950 and that will happen if the stock fails to move up from current levels. Traders can exit the position if the premium rises to ₹30 or dips to ₹10.

Published on September 03, 2017

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