Technical Analysis

SPARC (₹129.5): Buy

Yoganand D BL Research Bureau | Updated on October 17, 2019 Published on October 17, 2019


Investors with a short-term perspective and contrarian view can buy the stock of Sun Pharma Advanced Research Company (SPARC) at current levels. After a corrective up-move from the 52-week low of ₹107 recorded in early July this year, the stock encountered a key resistance at around ₹170 in late July. This significant resistance continued to cap the up-move until mid-September. The stock resumed the medium-term downtrend. But, the key medium-term support in the band between ₹107 and ₹113 arrested the stock’s fall last week.

Triggered by positive divergence in the daily relative strength index and the daily price rate of change indicator, the stock started to trend upwards. On Wednesday, the stock jumped 8 per cent accompanied by above average volume. The daily RSI has entered the neutral region from the bearish zone. Similarly the weekly RSI has also entered the neutral region.

As the stock reverses higher from the key medium-term support and backed by positive divergence, the short-term outlook appears to be bullish. Targets are ₹135 and ₹138. Traders with a short-term perspective can buy the stock with a stop-loss at ₹126.5.

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

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Published on October 17, 2019
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