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Investors with a short-term perspective can buy the stock of IOL Chemicals & Pharmaceuticals at current levels. The stock jumped 8.7 per cent accompanied by extraordinary volume breaking above a key resistance at ₹185 on Monday.
Pharma stocks were in limelight on the day, regaining the defensive appeal, even while the benchmarks slumped 1 per cent. IOL Chemicals & Pharmaceuticals took support at ₹162 in early December 2019 and started to trend upwards. Since then, the stock has been in a short-term uptrend.
While trending up, the stock had breached its 21- and 50-DMAs in mid-January and continued to trade well above them. The recent rally has decisively breached the 200-DMA. The daily relative strength index has entered the bullish zone from the neutral region and the weekly RSI features in the neutral region with an upward bias. Moreover, the daily price rate of change indicator hovers in the positive terrain implying buying interest.
Overall, the short-term outlook for the stock is bullish. The stock has the potential to trend upwards and reach the price targets of ₹201 and ₹205 in the forthcoming trading sessions. Trader can buy the stock with a stop-loss at ₹189.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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